I’ve been struggling a lot lately. I’ve been angry about a lot of things. Over in the work field, mostly, which is what I’ll blog about here…but it applies in a similar way to my personal life as well.

As I look around the office here, I realize I am not where I want to be in life. Somewhere inside of me, I know Simpli can be an amazingly successful company. That’s what attracts customers and employees to us. It’s what people see in me that makes the difference between selecting Simpli as their hosting provider and selecting another (faceless) hosting provider. You also know that I’ve done something amazing and will continue to do amazing things. That’s why you read my blog.

I have a confession to make: Simpli barely breaks even every month. I know we have lots of reasons why that’s the case, but they all boil down to something simple. You see, I’ve been running this business the wrong way. The reason the business isn’t massively profitable is because I actually fear running a successful business.

“What?” you might be saying right now. “But you already run a successful business!” Yeah, I do. And I’ve struggled with that for a long time. You see, I never intended Simpli to be a $1M/year business. I intended it to be something fun that made me some extra money on the side while I did web design and programming and whatever else floated my boat. Except that word got out that Simpli was doing something different — that we were putting our customers first and not treating people like numbers. With basically $0 invested in marketing, we grew and grew and grew. Friends referred friends who referred friends. In 2004 I gave up consulting and went into this full-time.

You may have already known most of that story. I’ve said it a lot. But here’s what you don’t know. During that entire time, and still to this day, I engage in a very personal debate about whether I deserve all this. The crux of the matter is that I feel like I don’t deserve to be successful. (This is really difficult to even type…sigh.) Therefore, little pieces of Simpli fall apart. Those pieces are focused around the money aspect of Simpli: Our billing system sucks. Our website is difficult to order from. We don’t bill most of our customers properly, even when the debt from our upstream providers piles up and we’re not able to make the ends meet. And even when my employees get frustrated with me because they work long hours and because we can’t afford to hire new people. They’re all symptoms of the same problem: I’m afraid.

Let me tell you what my greatest fear is. My greatest fear is that all of our customers leave and I am left dirt poor, with no money (I have personal debt too, because I pay myself this ridiculously low salary from Simpli) and no place to live and I’ll have to go back to Indiana and face my parents, who really didn’t believe I could do this in the first place, and see some look in my mom’s eyes that said “I told you so, Erica. I told you you wouldn’t make it.” I have nightmares about this.

I get angry about my personal financial situation and about Simpli’s. And throughout all that, I battle constantly with which upstream provider bills to pay and which personal expenses to pay. All of this could be solved by billing our customers properly, getting investors, or making better hires. Instead, I filled my days with busywork (until my staff forced me to hire an office manager) or read blogs instead of doing things that really mattered to myself or my company.

I have to face reality before I throw either myself or my company off a cliff. I’m writing this because I want you to understand that the life of a CEO is not all glitz and glory. Even CEOs of $100 million+ companies have to get over fears, and I can tell you that those fears are multiplied in an intense way because the livelihood of other grown adults depend on the decisions you make. This is a big reason why companies tend to innovate less as they grow larger. Put simply, the people at the top are afraid. They’re afraid of alienating current customers or of losing stock values. And some of them, I think, have fears like mine. They’re simply paralyzed because they’re afraid it will all melt away someday…especially if they build the companies themselves, or like me, they’re afraid to really take the reins and run with what they’ve built. Why? Because what if it fails?

I am coming out on this blog and stating that I have this fear. It needs to be said. More CEOs need to act like human beings. We need to admit that we all have fears and nightmares and days when we think life or work is going to completely fall apart and we’ll wake up and realize that our businesses were just some cosmic joke and that we really have nothing. Those days suck. Let’s communicate about that.

What am I going to do about it? The same thing anyone with fear needs to do…get over it! I can no longer manage this company from a position of fear. I can’t manage it based on what we have and don’t have today. I must manage it based on where I see it in the future. I must create an amazing company on paper and then work backwards from that to where we are today. I cannot manage it based on hiring employees to fill gaps we have today. I must hire employees to fill the positions we need to grow and be profitable tomorrow, based on my vision for a highly successful future for both myself and Simpli.

Overall, I like being a CEO. But it is not easy. Each decision I make regarding my business affects hundreds of people. If I make a mistake, or say something wrong, I must be humble and apologize. But the reverse also applies. When I do something right, or my employees or customers do something amazing, I have to be the first one up there acknowledging it and thanking them.

I have a piece of paper on my bathroom mirror at home that says “Just say THANK YOU!” So…thank you to my customers, employees, and friends…and thank you to those who used to be customers or employees, too. I am grateful for all of you, and I promise you that I will lose this fear and lead Simpli from here on out. I will create a picture of where Simpli should be and focus all my effort there…and you will be part of a remarkable change from a little homegrown side project (circa 2001) to a $1 million per year revenue, successful business in 2007. I owe it to you to be the successful visionary you all see in me. I will make my dreams come true.

P.S. Simpli now has a blog at http://simpliblog.com — you can keep track of corporate happenings over there.

I’ve been pretty remiss lately with both blog updates and actually having a life outside of work. It seems they go hand in hand — whenever I’m too busy working, I don’t blog as often and I tend to not be able to keep up with friendships. There’s a lot going on at work, most of it good, and a lot of it significant, but I feel that requires a separate blog entry, and more accurately, a separate blog. More on that later this week, or perhaps next if I get totally swamped again.

But on to my personal life. Though there isn’t much of it to speak of, I do have a couple things that are interesting. The most interesting thing that happened recently was that I got a housemate. I haven’t had a housemate in 3 years or so, and haven’t had a female housemate (which my new housemate is) in 5 years or so…so why the change?

Well, for one, I needed some extra money to pay back some debt I have from major dental problems and some ongoing health issues. The ongoing health issues are mostly back- and wrist-related, and a chiropractor and a lot of ice packs are helping immensely, but chiropractors don’t come cheap. Unfortunately, a couple weeks ago I threw my lower back totally out of alignment and I have not really been the same since. Just when I started to feel like myself again, I helped my new housemate move in (yesterday) and now I’m limping around again. That’s just no good. Even though the chiro sessions are reasonably priced, I do sessions 1-2x a week right now (until I can get everything straightened out) and that’s just not helping my pocketbook.

So money was the first and foremost issue that made me seek out a housemate. If I don’t accumulate any new debt, and don’t use any of my current Simpli salary to pay off any more of my personal debt, with just the housemate monthly income, I’ll be debt-free in 12 months. That would be a tremendous achievement for me.

But it’s more than that. You see, my kitties were lonely. When I came home at night from work (and lately, it’s been come-home-sleep-wake-up-shower-go-to-work-come-home-sleep…), my kitty girls would just yowl plaintively at my bedroom door, begging me to love on them for just a few minutes. Of course, it’s rare that I even have a few minutes at home. I tried to make as much time for them as I could, but they were so sad. I saw it in their eyes. Therefore, a housemate who liked kitty girls also solved that problem.

Finally, I was getting kind of lonely in those weird night ways. You know, when you hear something that goes THONK in the middle of the night (and with two nocturnal kitty girls in the house, there are a lot of THONKs!) and you just hope that it’s not someone coming to rob you. Fortunately, that has never been the case for me… but it still makes me feel better to know someone else is here.

So, a few months ago, I set out on the path to find a housemate. I dug through the craigslist housing wanted section for a few weeks, responding to a few posts that looked interesting. I also posted my own place under rooms/shared a few times. I got a couple responses, but no one I wanted to live with. Then, one night, I was digging through housing wanted and found a post that had a title beginning with “Geek girl…” Really? Another geek girl? Wow, this was great!

We met at my place and immediately hit it off. Turns out we both work at Market Post Tower (she for another company there as a datacenter tech.) We have similar interests, but have different life paths, which makes for interesting conversations. My landlord interviewed her (and I mean really grilled her, too; it was funny!) and approved, so L moved in yesterday. My place has 3 bedrooms — she took 1 bedroom that was formerly my home office and I moved the home office into the smaller 3rd bedroom.

Obviously she has been here only a day, so I can’t say how well it will work out long term, but so far I’m enjoying having found someone I can live with and still count as a friend, too. A bonus is that she is female, but tomboyish like me, so we can share “girly” stuff without having to feel all weird and cutesy about it. This is very cool. I am happy. And now I can go pay my chiropractor bill and pay off all that tooth stuff that cost me a fortune a few months ago. The kitties are grumpy, but they will get over it. 🙂

So, on a whim, I went over to YouTube today and searched for “Parker Lewis”. I don’t know if any of you remember the show Parker Lewis Can’t Lose, but it was one of my favorites growing up. My dad and I used to watch it every week. Not only that, but Parker and his friends were geeky (and funny geeky, not horribly-awkward-to-watch geeky like Screech on Saved By The Bell.) Lo and behold, someone had posted a partial episode of Parker Lewis Can’t Lose up there.

The TV studios just don’t get it. I would have happily watched this partial episode as a preview and paid $10 to see all the episodes right then and there. I would have a much happier night tonight reliving memories of my childhood by watching Parker Lewis than I would by watching any of the crap that’s on TV right now, and I would pay to do that. Hello, studios? Parker Lewis isn’t making you any money sitting on dusty reels in some studio basement in Hollywood. Having it easily accessible online for a small per-download fee would make you money.

My personal belief is that we’ll see a real push from the studios to make this happen in the next 5-10 years, and I do believe that in my lifetime there will be micropayments (probably tacked onto a cable bill) to view each episode of old TV shows right from your TV or computer, on demand. But I don’t know how far they’ll go. Sure, a lot of people will pay to see the “big” classics like Cheers or Seinfeld. But will little shows like Parker Lewis ever make it to these on-demand distribution channels? I’m here to say to the studios: You’ll make more money by exploring the “long tail” of cult-hit shows like Parker Lewis than you will by only distributing the biggest shows. But who knows if they’ll actually listen to me…

Your opportunity to see me live on stage is tonight! I’ve been selected as a finalist in the Make Mine a $Million entrepreneurial competition. Hundreds of women from around the country applied for the Make Mine a Million award program, which recognizes women whose businesses have the potential (or, in my case, are very close) to reach the $1 million/year revenue mark. 30 finalists were selected, and I was one of them!!! I flew to New York City, and now I’m prepping to deliver a 3-minute pitch of my business on stage in front of 1200 live audience members and thousands more watching via webcast.

I’m going to be on stage at about 5:45PM EST. To see me live!!, please register over at SBTV.com (Small Business TV) now. You need to register before the event begins at 4PM EST/1PM PST in order to be able to vote on your favorite contestant (me, right? 🙂 ) In fact, Small Business TV just interviewed me, so that may show up on their website soon as well. Go ahead and vote for me at 5:45PM EST/2:45PM PST. Mark your calendars! Learn about the other 29 excellent women business owners who are here showcasing their businesses as well. Oh, and Hillary Clinton and Suze Orman are going to show up. 😉

Thank you for your love and support!

Jonathan Schwartz, Sun’s CEO, asserts that datacenters are doomed in his latest blog post, asking “Why bother with datacenters at all?”

As the owner of a web hosting company with a significant amount of datacenter space, owner of several Sun servers, and as a former Sun employee, my take on this is “I’m really glad I sold my Sun stock.” Schwartz clearly has no idea what his own customers are doing with the servers Sun sells them, or why Sun is really struggling in its core “big iron” market. He must have not taken a datacenter tour lately or priced out space in a datacenter (hint: prices are increasing rapidly as space fills up.)

First, I agree with Jonathan on one key point (apparently the only point in his blog entry that is based on actual analysis.) He says, “At least from our internal analysis, the availability of IT infrastructure is inversely correlated to foot traffic. The more people allowed in a datacenter, the more likely they are to kick a cord out of the wall, break something trying to fix it, or just bump into things…. As the best systems administrators will tell you, the most reliable services are built from infrastructure allowed to fail in place, with resilient systems architecture taking the place of hordes of eager datacenter operators.”

Right. Schwartz is correct in this point — people in datacenters are generally not a good idea because human error comes into play much more often in that scenario. But to extrapolate that this means datacenters are not needed is absurd. This in the face of news that Google is building a huge datacenter in Oregon and Microsoft is building a huge datacenter in Washington. And, if you ask around here in the Valley, you’ll find new datacenters opening all the time.

So why will datacenters continue to be relevant? Simple — economies of scale. Building out 10Gbit of pipeline to the middle of nowhere is expensive. It’s also more expensive to build out 1 T1 (1.5Mbit) to 100 locations with 1 server in each location than it is to build out 4 redundant 100Mbit connections to 4 major datacenters and putting 25 servers in each location. Not only is it cheaper, but you get more bandwidth and better connectivity to every server in the datacenter scenario… and much more flexibility should you find yourself at max capacity in a year and needing to build out more servers, space, and add additional bandwidth.

Power, space, and bandwidth (connectivity) are all cheaper when purchased in bulk quantities… and they’re all cheaper when you’re next to the power plant and next to a SONET (fiber) ring. I agree that fewer datacenters will be built out in downtown areas in the future. Datacenters will be built where there are 3 things that come together:

1. Cheap-ish labor. Remote hands/reboot monkeys can be there 24×7 to provide security and do anything that needs doing in the datacenter for $10/hour or less.
2. Cheap power. Google building their datacenter in Oregon next to a hydroelectric dam, for instance… and a couple huge datacenter installs in Las Vegas, where power is cheap. Here in the Bay Area, there’s a whole street full of datacenters coming online in Santa Clara, where there is a co-op providing much cheaper power than PG&E can provide.
3. Availability of large amounts of bandwidth. What amazes me the most about Schwartz’s latest post is that Sun’s entire motto used to be “The network is the computer.” Look at Google releasing an office suite, for instance. What about salesforce.com? Web-based email? Where does Sun think these services come from? As the number of web-based services continues to grow, and their quality continues to increase, more and more companies will be subscribing to these services. These services are particularly tailored toward small business, a market that hires 70% of the employees in the U.S. but a market that Sun has never understood. Sun was always about Big Business. But small businesses drive the market forward, and most innovations come from the small business side. If Google et. al. can make office suites and email over the web work like email and office suites do today on our PCs, a huge market will open up.

What is behind that market? DATACENTERS!

What boggles my mind is how I know this and how Schwartz, CEO of Sun Microsystems, didn’t seem to get that message. I know this because we have hundreds of customers who are using our datacenter space to provide services over the web that would normally be relegated to a back-office server somewhere. Companies don’t want those back-office servers any more. They don’t want to pay IT staff to maintain them and they don’t want everything to be offline if one crappy desktop gets its power cord kicked out (exactly the same scenario that Schwartz mentioned in his blog post.) That’s why they’re putting servers in datacenters! We get calls like that so often that I’d say there is easily a $10M/year (yes, ten million dollars a year!) business in providing that sort of outsourced IT to companies. Now here’s the kicker. I said $10M/year. I think there’s a $10M/year business in providing that to companies in Santa Clara county alone. Providing it nationally? It’s worth billions! No question about it. Where do you think IBM Global Services gets so much money?

I have no idea what makes Sun so blind to this market. Perhaps it’s because they tend to ignore small businesses (as mentioned above.) It’s the smallest businesses (fewer than 10 people) that are demanding this. They are screaming for someone to come in and put their Exchange/Novell/groupware/file sharing services/website on a few redundant servers in a datacenter (and then back it all up to another datacenter) and then give them a private leased T1, T3, etc. back to their offices, and a smallish connection to the Internet to serve files out, serve a website out, and serve outgoing email. And they’re willing to pay thousands of dollars a month to have someone do it, because paying a company $5000-$8000 a month to do this is cheaper than hiring one or two IT people! The companies that successfully pull of this migration will make millions and millions of dollars.

So why not Simpli? Well, we’re in a slightly different market. But we’re still looking into it, because the demand is so high. It will take a lot of engineering talent to pull it off. And it takes a lot of staff resources to set up this infrastructure. The big question for this new company owner is: why use Sun servers to power your huge datacenter when you can use cheaper Intel or AMD-based servers running whatever you want? The Web 2.0 industry already knows this, and it’s why Sun missed the bandwagon there too. I’m amazed that Sun doesn’t see this, but with those “big business” blinders that Sun has, they would never acknowledge this market. Someone will, though, and Sun will become even more irrelevant than it is today.