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What I Learned After My First Month Running a VPS Hosting Business

Published May 3, 2026  ·  10 min read  ·  Dakota Hopson, Galaxy Cloud Solutions

I launched Galaxy Cloud Solutions on April 14th, 2026. It's now May 3rd. That's nineteen days, not quite a month — but I've learned enough that I think it's worth writing down before I forget what it felt like to be this new at it.

The short version: it's going better than I expected in some ways and weirder than I expected in others. Here's what actually happened.

The Setup

Galaxy Cloud Solutions runs out of my home in Valley City, North Dakota — population about 6,000. The hardware is a Dell PowerEdge R630 that I bought used: dual Xeon E5-2660 v3 processors, 62GB ECC RAM. It sits in my home office drawing about 190-200 watts continuously, connected to CSI Cable's business internet line.

I built the entire stack myself — Proxmox hypervisor, FOSSBilling for customer billing, custom Python automation for VM provisioning, monitoring, bandwidth tracking, everything. The codebase is somewhere around 27,000 lines of Python and PHP at this point. I wrote most of it in the weeks before launch.

I'm the only employee. I do the infrastructure, the billing, the support, the marketing, and apparently now the blog writing too.

What Surprised Me: The Technical Stuff Was the Easy Part

I expected the hard part to be keeping the servers running. It wasn't. The R630 has been rock solid. Proxmox has been rock solid. The automated monitoring catches issues before customers notice them. In nineteen days I've had zero unplanned downtime.

The hard part has been marketing — specifically, getting people to find out the business exists. Building the thing was satisfying. Telling people about it has been humbling.

I posted on Hacker News twice. The first post got 8 points before getting flagged as promotional. The second one did better. I posted in every relevant Facebook group I could find. I set up Google Ads. I wrote about 20 blog posts comparing Galaxy Cloud Solutions to competitors. I listed the business on HostAdvice, Product Hunt, Hacker News, and a bunch of other directories.

As of today I have two paying customers and a third who's in conversation. The MRR is $25. That's honest.

What I Got Wrong: Underestimating the PayPal Dispute

My first customer paid via PayPal. Within a week they filed a dispute claiming the service was "not as described." I'd suspended their account for an AUP violation — they were running bandwidth reselling applications on the VPS — but the dispute still had to be resolved through PayPal's process.

I submitted five documents of evidence. PayPal sided with me and I won the dispute. But the whole thing took two weeks and occupied more mental space than it should have for a $5 charge.

The lesson: get your AUP very clearly documented before you launch. Mine was, which is why I won. But I should have been more aggressive about communicating the violation to the customer before suspending rather than after.

What I Got Wrong: The Stripe Verification

I enabled Stripe on day one but couldn't fully verify the account for weeks because I was waiting on the CP575G from the IRS to arrive by mail. In the meantime I was limited to PayPal only.

If you're starting a hosting business: file for your EIN online immediately, save the PDF confirmation, and use that for Stripe verification. Don't wait for the paper notice. I lost probably two weeks of Stripe availability because I didn't know the online confirmation was sufficient.

What's Actually Working: The One-Click Installers

I built one-click installers for a bunch of applications — WordPress, Minecraft, Docker, WireGuard, and most recently FiveM QBCore. The FiveM one took most of a night to get right because of some genuinely weird quirks in how FiveM's Linux server works. But now it works end-to-end: customer clicks the button, enters their license key, gets an email with their txAdmin URL and PIN.

That's the kind of thing that differentiates a small indie provider from a commodity VPS. A large hosting company doesn't build a custom FiveM installer. They sell you a VM and tell you to figure it out. I actually know how FiveM works because I ran an RP server, and that knowledge is now in the product.

What I'm Still Figuring Out: Pricing

I priced my plans by looking at what DigitalOcean charges and going lower. That seems right but I honestly don't know if I'm leaving money on the table or pricing myself out of the market in some segments.

The $5/mo Nebula 1 plan feels almost too cheap — it's basically at cost once you factor in the electricity, ISP, and amortized hardware. But it's a real plan that works for real use cases like running a WireGuard VPN or a personal project. I'm keeping it.

The Numbers After 19 Days

• Active paying customers: 2
• MRR: $25
• Total revenue: $25
• Server uptime: 100%
• Support tickets handled: 4
• PayPal disputes: 1 (won)
• Blog posts published: 20+
• Google Ads spend: ~$80
• Facebook Ads spend: ~$50
• Lines of code written: ~27,000
• Hours of sleep lost: unclear

What I'd Do Differently

Start marketing before launch, not after. I spent the first two weeks before launch entirely on infrastructure and automation. I should have started building the blog and getting the Google Ads account set up at least a month before launch so there was some SEO momentum when the doors opened.

Also: do the business registration and EIN paperwork first. I filed for the LLC and EIN a few weeks before launch but it still caused delays with Stripe and other payment verification. That stuff takes longer than you expect.

What's Next

Keep building the product, keep writing content, keep talking to potential customers. The fundamentals are solid — the infrastructure works, the automation works, the billing works. The only variable now is distribution.

If you're reading this and you need a VPS, I'd genuinely appreciate your business. Not because I need the money (though $25 MRR is, uh, humble), but because every customer teaches me something about what people actually need from a hosting provider. The feedback loop is the most valuable thing at this stage.