It sounds exciting that you started working on smart module. It can turn your IoT hardware as real smart products.
Unfortunately, you cannot use local network server to host smart module. I guess your server is behind firewall or router according to your URL. It means MODE cloud cannot reach to your local network servers. (Sorry we didn't clarify the point in our documentation. We will add more Q&A section!)
So you have to use some hosting server to run your web server as smart module. You can use AWS, Digital Ocean or other hosting service to run your service. Or you can use Sakura internet if you like Japanese hosting service.
My preference is Heroku. If you know Node.js or Ruby on Rails, you can easily develop and deploy your code and host your service. And if you just make simple service, it's free I often use it for our testing.
If you have any other questions, please feel free to ask us.