Projects · Mini Hostpapa
Business Model & Revenue
How HostKid makes money, and why ERPNext powers billing plus the full internal corporate stack.
Business Model & Revenue
Alright. We know what a hosting company is. Now the question every engineer secretly avoids until it's urgent:
How does this thing pay for itself?
If you can't answer that at executive level, you'll over-build infrastructure and under-build the corporate systems that collect money and run the company. HostKid won't make that mistake on paper, even if the lab starts small.
The core business model
HostKid runs a subscription + usage hosting model:
- Customers pay recurring fees for products (VPS, shared hosting, email seats, domains)
- Optional add-ons (extra storage, backups, premium support)
- Renewals drive retention; churn is the silent killer
We're not building a consulting shop. We're building a product company where the product is infrastructure wrapped in automation and support.
In the lab, revenue might be fake (test invoices, pretend SKUs). The model is still real, because Volume 11 (Corporate) and Volume 10 (portal) will implement it.
ERPNext: all-in-one corporate backbone
HostKid does not treat billing as a standalone script or a spreadsheet duct-taped to Stripe. We use ERPNext as the all-in-one internal platform for running the company:
| Layer | What ERPNext covers | Why it matters for a host |
|---|---|---|
| Billing & sales | Products, subscriptions, quotations, invoices, payments, customers | Every VPS SKU maps to a real financial object |
| Enterprise resources | Accounting, inventory, procurement, projects | Internal spend and assets stay traceable |
| HR | Employees, leave, payroll hooks, org structure | Even a small team needs one HR source of truth |
| Operations visibility | Unified data model feeding analytics | No “revenue in one tool, costs in another” chaos |
On top of ERPNext we use Frappe Insights for the company cockpit: high-level metrics, profit signals, trends across sales and operations. Not pretty charts for their own sake. The owner view: Are we making money? Where is margin leaking? What changed this month?
I've worked on developing smart ERP solutions in this ecosystem: practical integrations, dashboards that executives actually open, and AI-assisted workflows that reduce manual entry and surface anomalies (failed renewals, margin drift, stale subscriptions). HostKid documents that approach here, not as hype, but as how a small host can run like a company, not a side project.
Executive rule: portal, provisioning, and ERPNext must stay synced. Paid but not provisioned, or provisioned but not billed, is a company-killer. Volume 11 (Corporate) implements; this doc sets the intent.
Revenue streams
| Stream | Example | Volume that implements |
|---|---|---|
| VPS subscriptions | €9/mo, 1 vCPU, 2 GB RAM, 40 GB disk | 15, 11, 19 |
| Shared hosting | €5/mo, WordPress site, SSL, mailbox slot | 14, 11 |
| Domains & DNS | €12/yr domain + DNS hosting | 12, 11 |
| Email mailboxes | €3/mo per mailbox on business plan | 13, 11 |
| Object storage (later) | €/GB-month buckets | 16, 11 |
| Add-ons | Backups, extra IPs, priority support | 11, 23 |
Rule of thumb: if you can't map a SKU to a CloudStack offering, an ERPNext item, and a portal product, it's not a product yet. It's a favor.
Cost structure (what eats margin)
Hosting looks like high margin until you count everything:
| Cost bucket | Examples |
|---|---|
| Infrastructure | Servers, power, bandwidth, storage |
| Software & licenses | Support tools, payment fees, optional commercial software |
| People | Support, ops on-call, engineering (HR tracked in ERPNext) |
| Acquisition | Marketing, sales time (even if organic at first) |
| Risk | Incidents, abuse, fraud, bad migrations |
Executive decision: overselling capacity boosts short-term revenue and long-term fires. Capacity discipline lives in Executive metrics & SLOs and Volume 27. Margin visibility lives in Frappe Insights on top of ERPNext data.
Pricing philosophy for HostKid
For this project we keep pricing simple and legible:
- Few SKUs: good, better, best; not 400 confusing plans
- Monthly + annual: annual discount for cash flow and retention
- Transparent limits: disk, bandwidth, mailboxes; no surprise overages on day one
- Upgrade path: shared → VPS → more resources without migration trauma
We're documenting tradeoffs, not pretending to beat OVH on price. We win on clarity, automation, and learn-in-public depth.
Unit economics (executive back-of-napkin)
You don't need a finance degree. You need intuition:
Questions we track at executive level (many visible in the Insights cockpit):
- Cost to provision one VPS (automation vs manual, Volume 19 story)
- Support tickets per 100 customers (product quality signal)
- Average revenue per account (ARPA) as we add products
- Churn when provisioning or ERP billing sync fails
Detailed ERPNext setup, HR modules, and Insights dashboards: Volume 11, Corporate. Here we only set what matters.
What this doc does not cover
- ERPNext configuration, taxes, payment gateways → Volume 11, Corporate
- Product SKUs in CloudStack → Product portfolio
- Customer signup flow → Customer lifecycle
Next: Organization & departments. Who owns the money and the machines.