First off, congratulations to Joshua Strebel and to his wife as they are now first-time parents. Secondly, Joshua has put together a pretty transparent view as to how he created Page.ly, a WordPress specific hosting service. So far, the guide is five parts long but I advise you to start out with part 1, Identifying the opportunity.
I had a very bad experience with Page.ly. I signed up for a trial but never used it. They ended up charging my credit card for over a year without sending me a receipt of any kind. Finally when I called to cancel they refused to refund the money they charged even though the site had gone down. Read their terms of service carefully before handing your credit card information over to them.
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Hey Jeff, looks like the link is broken.