I Grew ARR From $500K To $1M In Three Days Hosting Palworld [Update]
This is a follow up story for Indifferent Broccoli. If you're interested in reading how they got started, published over 3 years ago, check it out here.
Hello again! Remind us who you are and what business you started.
My name is Jake Gaba, and I run the video game server hosting business Indifferent Broccoli. In the last three days, our MRR has grown by 50%. From about $43k/month to about $75k/month. By the time this interview is published, I’m sure that 50% growth will be 100%. This is all thanks to Palworld server hosting. Palworld is one of the most played games of all time–and it allows players to host their servers from 3rd party providers like Indifferent Broccoli.
Indifferent Broccoli rents servers to gamers who play survival video games, such as Minecraft, Valheim, 7 Days to Die, Project Zomboid, and Satisfactory. Most of our customers are small groups of friends with fewer than ten players – but we are also a go-to host for larger community servers that make money from their playerbases.
I bought this business in 2021 while on a gap year from business school at Stanford. I paid $25,000, and it had about $1,600 MRR.
My annual revenue trajectory since acquiring the business has been:
2021: $63,168.45
2022: $340,205.43
2023: $514,632.98
Tell us about what you’ve been up to. Has the business been growing?
The last few days, I have gotten almost zero sleep. Palworld’s release is a once-in-a-decade opportunity. All my servers crashed because I had more customers sign up every 30 seconds than I typically have in a day. My customer support team and I have been working to expand our server supply, stabilize our existing machines, and reassure customers non-stop since Friday afternoon.
Communicating with customers has been key. They are frustrated. They want to play. The machines are crashing. But many of them express extreme gratitude towards us for being open with our status and plans. These are the last few announcements I’ve made in our Discord:
The last 72 hours and the last 2 years have been a wild journey. This is the change in MRR over time for my top products: (Note: this is Stripe only. In August 2022, I added support for PayPal payments, which are not reflected here)
Growing my business feels like playing a video game. To level up in a game, you have to grind. You have to defeat enemies over and over again–and complete quests over and over again. You have to play every day.
As you can see, sometimes one game will rise rapidly while another falls. These games ebb and flow in popularity, which is why it is important to diversify.
Adding new games doesn’t only smooth overall revenue, it also has been my main source of growth. The growth in 2022 was primarily due to adding three games: Project Zomboid, Satisfactory, and V Rising. I was fortunate to rank #1 for each of these games on the review site Geekflare, which you can see here, here, and here. (And for Palworld now too). The growth in 2024, so far, is 100% from Palworld. And I likely will see even more growth with the launch of Enshrouded this week.
Unfortunately, 2023 did not see the same level of growth.
In 2023, I graduated from business school, learned basic Serbian, drove across the country, got married, attended three weddings, and hit $500k in revenue. It was a whirlwind. And unsurprisingly, my server hosting business did not grow. Not only was I busy with life, but also there were no new hit games released.
One thing I did accomplish in 2023: I reduced my time required to maintain the business.
Projects that lead to substantial growth generally require prolonged focus. My focus was in short supply as I wrapped up school and prepared for the wedding. Instead, when I was able to give Indifferent Broccoli my attention, I worked on time-saving projects.
It’s much easier to automate away the manual portion of an up-and-running feature than to build a new feature that could lead to growth. Throughout 2023, I brought my required “maintenance” time down from about 10-15 hours a week to about 3-5 hours a week.
I accomplished this time-reduction in a few ways:
- Gave more responsibility to my customer support team to manage billing issues and additional support channels. Shout out to Indifferentchicken and Bawss.
- Added a GPT-powered AI customer support bot to Discord.
- Fleshed out the Indifferent Broccoli wiki to answer frequently asked questions.
- Let users who paid with PayPal change their subscription plan size without needing customer support help.
- Let people change their server region without customer support help.
- Refactored portions of the codebase to make future development quicker.
- Fixed general bugs.
Now that I’m working on Indifferent Broccoli full-time again, I can focus on growth-generating projects rather than maintenance tasks. As one of my professors said, I can work ON the business, not IN the business.
Outside of getting lucky with a new game appearing, the big question is: “So what do I do now?” When brainstorming what to work on, I look at my funnel (a.k.a. my CORE FUNNEL).
- How many people see that my business exists (e.g. impressions on Google, views on a sponsored YouTube video, etc.)
- How many people visit my website
- How many people create a free trial account
- How many people pay for a subscription
- How many people pay for their 2nd month
I have a funnel for each game I offer. And each column for each game offers an opportunity to grow the business. I can brainstorm wiki content ideas to improve SEO and my organic search impressions. I can change the layout of the Project Zomboid landing pages to improve the conversion from “Landing Page View” to “Account Creation.” Or I can add more games to improve the conversion from 1st payment to 2nd payment because customers can switch to a new game if they are tired of the first rather than cancel.
That’s what my 2024 will look like. Knocking off items from that brainstormed list. Let’s hope that moves the growth needle more this year than last year.
The biggest challenge is the metagame: managing your discipline. Try to accomplish at least one meaningful thing per day.
What have been your biggest challenges in the last year?
The biggest challenge was balancing life and work. But I was imbalanced in the direction opposite most people–too much life and not enough work. Towards the end of 2023, my idea of a vacation was sitting in front of my computer and working for two weeks without any distractions. I believe the correct term for that is First world problem.
This was a good lesson for me to learn. I like to work. It’s fun. Aside from Indifferent Broccoli being a video game business, working on Indifferent Broccoli feels like I’m playing a game. I mentioned in my last interview that growing a business is quite similar to playing grand strategy games like Crusader Kings.
My plan to address this challenge in 2024 is simple…work more. I have already started taking it too far to the extreme with all-nighters dealing with Palworld hosting.
What have been your biggest lessons learned in the last year?
The biggest lesson I learned this past year: is don’t miss weddings. The couple getting married will forever have a special bond with the friends and family who attended the wedding. I not only got married last year but also attended three other weddings of friends. These events are no joke–they are usually the most important day of the couple’s life so far.
This is one of the biggest reasons why you should run your own business. Having to miss major life events because you are on someone else’s schedule is horrible. Don’t optimize for money–optimize for freedom.
You have to be in the water to catch the wave. There is zero chance I could have been prepared for Palworld if I was not working on game hosting full time. I was ready when the tidal wave came.
To level up in a game, you have to grind. You have to defeat enemies over and over again–and complete quests over and over again. You have to play every day.
The last big lesson: Wedding videographers also make great broccoli-shaped ice cream.
What’s in the plans for the upcoming year, and the next 5 years?
My main plan is to continue to grind. Remember when I said growing my business feels like playing a video game? To level up in a game, you have to grind. You have to defeat enemies over and over again–and complete quests over and over again. You have to play every day.
The brainstormed list of funnel improvements won’t be implemented themselves. Whenever I feel demotivated, I pretend the item on my TODO list is a quest in World of Warcraft.
Top quests for this year:
- Add more games
- Partner with YouTubers to promote Indifferent Broccoli
- Experiment more with Google Ads
That’s my main plan. But my more exciting “side quest” plan is to build a game.
I’m learning game dev with the open-source engine Godot. I’ve been building quick, mini-games to teach myself. But my dreams are bigger.
My first substantial game project will be about indifferent broccoli, who, in a world (fridge) of emotional foods, falls in love with the only other indifferent-looking thing he can find: an electrical wall socket. It is a tale as old as time.
What’s the best thing you read in the last year?
I got married last August, and instead of traditional gifts, we asked for guests to give us their favorite book + marriage advice. Almost every guest gave us a different book–but four separate people gave us Tomorrow, and Tomorrow, and Tomorrow by Gabrielle Zevin. That’s a lot of tomorrows. The story is about childhood friends who reunite and start a video game studio together.
Reading a story about successful video game developers reminded me how lucky I am to make a living building a video game company. It also nudged me to explore making games versus only hosting games. Indifferent Broccoli game studio is on the horizon.
My “indifferent broccoli falls in love with indifferent wall socket” game story idea is inspired by another wedding book we received: Hans Christian Andersen’s The Steadfast Tin Soldier.
Advice for other entrepreneurs who might be struggling to grow their business?
The biggest challenge is the metagame: managing your discipline. Try to accomplish at least one meaningful thing per day. If you have a software-based business, then every feature you build or bug you squash is a potential permanent improvement.
Five permanent improvements per week snowballs quickly. Looking at the calendar and seeing two weeks have gone by, you haven’t done anything meaningful…That is a big motivation killer.
Some weeks I’ll work a normal 9-6 schedule. If I become unfocused and unproductive, I’ll mix it up. One of my most productive periods was when I was working 10 am to 2 pm with no break in the middle, then forcing myself not to work the rest of the day. If I know I only have 4 hours, then I sure as heck am not going to get distracted browsing the FatFire subreddit. And the last few days, I’ve been working 24/7.
Are you looking to hire for certain positions right now?
I’m always looking to meet talented people. Currently, my priority is meeting gaming content creators interested in partnering on either a sponsorship or affiliate basis. If you have an audience of gamers on Twitch or YouTube and want to make additional income, let’s chat. You can message me on Discord.
Where can we go to learn more?
Visit Indifferent Broccoli for more information about the games we support and join our Discord to stay in touch.
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