Interview with Robert Sauchyn

What is the name of your company?

LFC Hosting

What is your name and title?

Robert Sauchyn, President/CEO

When did your company officially launch?

December, 1996

What type of hosting services do you currently offer?

Most hosts today concentrate on providing the most web space for the lowest price, even when the average website is still only 2 MB, while providing unsatisfactory customer service, reliability, and support for back-end (hidden) capabilities, resulting in an endless string of hidden fees with hosting plans that may appear very attractive on the surface.

At LFC Hosting, we focus on providing many more valuable features - features that are typically available only to large companies, at a very affordable cost, making them accessible to businesses of any size through our innovative business and network design. It is these capabilities, together with our all-inclusive approach to hosting, superior customer service (rated #1 by various industry rating sites), reliability, and network response times, that give your business the distinct online advantage over your competition in hosting with LFC.

What do you believe the future holds for the web hosting industry? And do you think the number of hosting providers will increase, lessen, or remain the same?

Rather than making predictions relating to emerging technologies such as WAP or .NET, I would like to discuss the evolution of web hosting from a business perspective, which has the ultimate effect on the industry as a whole and on the consumer.

Web Hosting at the present time is turning from a highly lucrative industry driven by thousands of three-month old startups willing to draw blood (or trade their reputation) for more domain name accounts, to an industry driven by the needs of business consumers: quality (that is, service level), dependability, and scalability. This is apparent when going back in time through the host review archives of "find-a-host sites", which, only one year ago, were dominated by horrific reviews of (mainly anonymous) web hosts.

This trend, not unique to the hosting industry, is beginning to result in fewer, larger web hosts governed by customer-driven business morals. These are the morels of the next-generation web host:

Web Hosting is the support of the online business activities of companies and organizations. This includes, but is in no way limited to the housing of web data. Web Hosting includes making the online front-end and back-end of a company available to the world 24/7, and everything that goes along with this, including support for web technologies, security, and associated systems such as e-mail.

It is a web host's responsibility to provide these services at a level capable of fully supporting the business practices, in their entirety, of its whole client base. This includes network speed, security, and reliability, and customer service, that is, immediately addressing the changing needs of its clients. In other words, a web host's systems must be built to fully support the business practices of its largest corporate client with the attitude that, when the host, or part thereof, goes down, its clients are unable to operate.

Finally, it is the responsibility of the web host to continually adapt to the rapidly evolving technology industry, ensuring that the newest technologies are immediately available to its clients, and easy for them to implement, without making it the responsibility of the client to setup, debug, and even fully understand these technologies, but making it clear to the client how to use technology to leverage their existing practices when possible to do so.

What do you feel your companies' major advantage over other hosting companies is---Why would someone decide to host with you over your many competitors?

The LFC Advantage

LFC Hosting provides a unique, highly affordable, business-oriented approach to web hosting. A whole array of non-standard features and capabilities that competing hosts simply cannot provide, even with their "e-commerce" level plans, are highly accessible and easy to implement for businesses of any size, providing you with new possibilities for doing business online. Our state-of-the-art connection and servers ensure rapid response times and thus no loss of visitors to your web site.

Our superior reliability, customer service, network response times, and the many innovative advanced features and developments go beyond a standard Internet presence and have made LFC a leader in the industry. Your business gains a distinct advantage over your competition by making full use of the many backend capabilities of the Internet.

Our all-inclusive approach, with many free domain names, POP3 accounts, and essentially everything you will ever need to do business online, allows you room for expansion; there are no hidden fees, so you don't pay extra as your site grows. This differs from the strategies of most other web hosting companies, who 'capture' clients with a cheap package, then later collect various hidden fees for extra services and sacrifice support and reliability as another means of reducing basic package costs.

LFC has been in the business of providing dependable Internet business solutions since 1996 and now services clients in over 50 countries. Our reliable on-site network was built with business in mind.

We are simply able to offer a higher quality of service with many more features, everything you need to conduct secure electronic commerce, at a lower cost overall than competing services.

What major accomplishments do you feel have taken place since your launch?

From 1996-1998, LFC was strictly a development and programming house. It was during this period that LFC discovered the opportunity to capitalize on the tendency for small businesses to, after developing a website, look to the developer for guidance in the ongoing hosting, support, maintenance, and growth of the website, actually, but rarely considered, the larger task. These businesses are looking for a complete solution that will give them competitive edge, but are seldom able to identify their precise technological needs. Many development firms were, at the time, offering a service with this in mind, although they were not equipped to develop and maintain the infrastructure of a large web host. No large web host to date had adopted this strategy.

LFC's new hosting service, based on this strategy, was packaged in 1998. The goal was to undercut the industry leaders while building a sustainable pricing structure allowing us to achieve the quality and longevity that is uncharacteristic of the "budget" hosting services. During the past few years, most .Com's have failed due to a lack of economic viability. Our initial challenge was, therefore, to develop, with very limited funding, a solid foundation of hosting customers allowing us to grow off of revenues, without relying on investment capital or, in many respects, the state of the economy. Businesses around the global began flocking to our unique, all-inclusive service, and within one year, we had acquired 200 hosting customers and automated our service and business processes.

In 1999, with a solid foundation of hosting customers in place, LFC knew how to manage a hosting network but recognized that the ability to market one's service better than their competition is the critical aspect of a successful business. Online marketing was also becoming increasing competitive at the time. Our challenge was to determine the marketing methods that work and those that don't and, simultaneously, determine whether a real, large-scale, need for our service even existed. The following two years were spent testing a wide variety of online marketing forms from search engines, banner advertising, and hosting directories to targeted e-mail campaigns, PR, permissions marketing, and affiliates (including our current customers), as well as offline marketing including direct mail, magazine ads, and a local trade show in Regina and Saskatoon called E-commerce Expo Canada intended to literally build a market for ourselves locally by raising awareness in the province. Eventually, we had developed a strategy built on those efforts that proved cost-effective: hosting directories and pay-per-click search engines, a miniscule and barely discovered part of what had been tried. All other strategies fell within this framework.

Our marketing strategy worked and we have since developed a solid work-force, dramatically expanded our automation and self-service solutions, some of which now exceed those offered by our Fortune 500 competitors, and built our state-of-the art data center in the Regina Research Park. LFC now serves 1500 customers (approx. 7000 websites) in over 60 countries.

LFC has developed proven packaged and automated solutions and sold them by the thousands, backed up among the best customer service in the industry. We have been building on these packages since, diversifying our offerings often by forming alliances with companies that are able to provide a particular service in a more cost-effective manner. It is through this approach that we are able to offer so many high quality services with so few staff. LFC is continually expanding, now hiring one new staff members every few months, and constantly acquiring customers in new provinces, states, and countries.

What segment of the market are you targeting, and what marketing efforts have been put into place to reach it?

Although LFC hosts many large corporations in our data center, we has always catered to the average small business with the need to develop to an Internet presence and sell their products and services online with limited capital. Our primary sector of service is the website and software development industry; however, LFC provides service to small business in every major business sector.

We advertise almost exclusively online, including: 1) Hosting Directories 2) Search Engines 3) E-mail Newsletters 4) Banners 5) Etc.

We also offer a variety of incentives for word-of-mouth referrals including the LFC Affiliate Program, and have began putting up large advertisements in the Canadian airports as well. Overall, we have found hosting directory advertising to remain the most cost-effective method of advertising for a web host.

As a private company, our entire profit margin goes back into marketing. Therefore, we have a relatively large marketing budget, one of the reasons for our exponential growth curve, which has been sustained for almost two years.

Can you give us an idea of your company's facilities? Location, datacenters, etc.

The government of Saskatchewan has built one of the most high-tech IT facilities in the country, that in which LFC resides. This facility has made it possible for LFC obtain dedicated cooling, nature gas generators, and all of the other services required by a typical data center at a low cost. Not only does this allow us to host our own network on-site but keep our costs low and also offer colocation as part of our suite of services.

Can you give us an idea of your financial stability in today's market?

At LFC, we attribute our longevity and financial stability to the following three factors:

a) Providing a High Quality of Service: At LFC Hosting, we have always made quality of service our #1 priority, ensuring that our current customer base is satisfied before attempting to acquire new customers. It is invariably cheaper to keep a customer than acquire a new one. Also, through this approach we have maintained a very good reputation in the industry, which has become our most powerful marketing tool.

b) Sticking with our Solid Strategy from Day-One: Very early in its history, LFC developed a unique business-oriented approach to web hosting to fill the short-comings of virtually every other web host at the time. This approach is three-fold.

Firstly, we concentrate on providing virtually unsurpassed customer service, reliability, and network response times; having a web host who possesses these three components is vital for any business to thrive online.

Secondly, we have adopted an all-inclusive pricing strategy. We include everything that the typical small business would ever need (5 domain names, full database and development platform support, etc.) throughout their growth on the web as standard with all of our business-level plans, starting at only $18/month. This eliminates the hidden fees that ultimately make other services more costly for businesses in addition to the need for a small business to anticipate where they will be on the web five years down the road in order to choose the most cost-effective hosting plan.

For us it all evens out for the simple reason that any given business user will probably use only a few of the features included with their plan, and different businesses require features sets. While everything that they don't use is free and available for them as they grow, our clients also gain the confidence that, as new technologies emerge, they will be made available to them free-of-charge.

Thirdly, we offer very up-front pricing. For example, our base business plan includes 20 MB of web space. Although this is plenty for virtually any business website (our entire 100 page corporate site packed with images is only approximately 3 MB), most hosts today still advertise ridiculous numbers such as 500 MB with a $8/month plan, of course, overselling the space and soaking their customers on additional fees.

This business-oriented approach continues to make our plans increasingly attractive as the hosting industry is being remolded. Web hosting consumers are starting to realize that you get what you pay for, especially when $18/month, the cost of our all-inclusive business-level plan is still small change for any business.

c) Adapting to Change: We have maintained a solid handle on the market, anticipating change and adapting to it quickly. Our corporate structure allows for extreme flexibility and speed of decision making, a requirement for any IT company to last in today's marketplace. As the first Canadian host to support WAP (reported by HostWhois in the fall of 2001) we were also one of the first hosts to provide inherent support for the .NET Framework. These features are immediately provided free-of-charge to all of our existing business customers, giving them the advantage online.

On average, how long does it take for a customer to get up and running?

Upon signup, our award winning customer service team will work to get your website transferred over as fast as possible and without any downtime. Your account will be setup within one business day (usually several hours), at which point you can upload and test your website. The transfer of your domain name, if applicable, can also take place overnight with or without the help of our customer service team; however, on average, our customers are fully setup with their domain transferred in two business days.

How do you help your customers grow their business?

LFC's all-inclusive hosting service gives you all of the tools you need to grow your business. As a "one-stop e-commerce shop", we also offer many other business services at low rates for our hosting customers, including merchant accounts, live credit card processing, shopping carts, software development, and web design/development. Finally, our business-oriented approach to hosting and state-of-the-art data center give you the peace of mind knowing that uptime, speed, and reliability are guaranteed, allowing you to safely grow your business with LFC.

Any additional comments?

LFC will be launching its new Control Panel v.3 in March 2003. This control panel will prove to offer the most advanced administration features on the market, setting LFC's client apart from their competition. Watch for this new release on the LFC Hosting website at: http://www.lfchosting.com.