Let me tell you a little story... There was a small book printing company. They made a book and printed it like a couple of thousand times. One day the owner of the company died and now the company was sitting on like 10 tons of books. My dad figured it would be a good way to make some cash so he bought around 2 tons of the books at $2 each. Then he sold them for $40 each. He was making a good deal of money but he made a mistake: He told his friend about the books. And soon enough 4 other guys bought the other 8 tons of books and sold them at the same market. It ended up with my father not beeing able to sell the books anymore as they started selling them for like $2. Now whenever I visit my dad I am laughing about 1 ton of books in his living room... Looks really funny especially considering that when I visit him in 20 years he will still be sitting on 1 ton of these ****ing books.

Now what I am seeing here is that whenever someone asks if it pays off to open up a new hosting company you guys are like: "Sure, why don`t you just offer the same as me but 20% cheaper ?? I definitely need some more competition because it is so boring if it is so easy to make all the cash with just 5 million competitors around". Ok guys, believe me: YOU ARE DOING A MISTAKE !!!! If someone asks you whether it pays off you should say "HELL NO !!" and whenever someone asks you whether they should advertise on Adwords you tell them "HELL NO !!". I mean do you hate money ? Do you want to go bankrupt or what is your problem ? Although this market is oversaturated like hell you still get some customers. Ok, that is right. But if you continue to tell people: "Hey, why not open another shop right next to mine" you are gonna **** this thing up for yourself and others !! I mean for real - think about it: If you advise someone to get your competition what do you gain from it ?? NOTHING !! What do you lose ?? THOUSANDS OF POTENTIAL CUSTOMERS !! Doesn`t it make extremely much sense not to motivate other guys to get into the hosting biz ?? So I'd really appreciate if in the future you guys would act a little bit more intelligent in regards to this, ok ? It is just for your own good.

Because if you offer reseller accounts your probably going to make money out of these people who ask if the industry is profitable.

They start up, buy reseller space from you for 6 months and then disappear.

Its better than saying "no the industry has no room for you" and not taking any of their money ;)

But what if they will grow big ? One big competitor can harm you more than 100 reseller accounts will make you in 6 months.

you gain self worth and the satisfaction of helping people. Not everyone is a greedy ******* you know...

I do not understand why people offer reseller accounts or dedicated servers (unless you own a DC, of course) in the first place. It simply doesn`t pay off. You make 20 bucks instead of 5 you are making from a normal customer but then this reseller is gonne take away 20 of the customers who would have paid you $5 each.

the reseller could be selling to a different market, and is getting costumer's that probably never would have found you. Your post count doesn't represent your intelligence about web hosting.

Originally posted by thomas.smith
But what if they will grow big ? One big competitor can harm you more than 100 reseller accounts will make you in 6 months.

Again, I disagree.

- Reseller startup's
- Established / Medium hosts
- Big hosts

Are all on different terms and appealing to different customers. I dont feel threatened by small newbie's just as I dont feel threatened by big players such as oneandone.

You have to think logically and not be worried by hosts in totally different levels of the game.

Many factors determine why a customer shops with which level fo host, and there is plenty for all.

>you gain self worth and the satisfaction of helping people. Not
>everyone is a greedy ******* you know...

Great...what does that buy me ?

ne big competitor can harm you more than 100 reseller accounts will make you in 6 months.

P.S. 100 reseller accounts for 6 months is big money. I'll take that over convincing someone they shouldnt be in the business anyday!

Reason?

I concentrate on my own business and own customer base more than I look and worry about the competition.

You should do the same as your obviously extremely worried by anyone considering entry to the market?

Originally posted by UH-Matt
Again, I disagree.

- Reseller startup's
- Established / Medium hosts
- Big hosts

Are all on different terms and appealing to different customers. I dont feel threatened by small newbie's just as I dont feel threatened by big players such as oneandone.

You have to think logically and not be worried by hosts in totally different levels of the game.

Many factors determine why a customer shops with which level fo host, and there is plenty for all.

Think about it: Where do small hosts advertise ? Where do you advertise ?

>P.S. 100 reseller accounts for 6 months is big money.

Well, maybe 10 to 15k. But what does a large hosting company cost you ?? Maybe multiple times that much.

>I concentrate on my own business and own customer base
>more than I look and worry about the competition.

You are making a mistake here...believe me. I know you got a lot of customers and it doesn`t come from nothing but times change... Believe me. There are two things to determine how successful you are:
1. Your own strength
2. Your competitors strength

The better you are and the worse your compeition is the more money you will make in the end so that are the two things to focus on in business: Making yourself strong and keeping the competition weak. Look at Bill Gates: He realized that keeping the competition down is even more important than fixing your own bugs and he has tons of cash. Sounds extremely ****ed up but it is the truth.

>You should do the same as your obviously extremely worried by
>anyone considering entry to the market?

I am extremely worried about absolutely everything that could turn into a problem once and that is the right way to do business. In the end it is going to pay off for me.

So I'd really appreciate if in the future you guys would act a little bit more intelligent in regards to this, ok ? It is just for your own good.


Your entire post was appalling and disgusting. Just ATROCIOUS! Where on earth are you from? I've read a lot of your posts before and I must say you have got to be a schizo. The obvious is stated in your post and everyone already knows this. This would apply to all forms of businesses out there, however, as UH-MATT said, instead of being so paranoid on who's going to "steal" your "potential" clients work on getting those potential clients.

Anyhow, negative energy is the last thing any company should have on their mind. I'm not sure if you are aware of the saying "Greed Turns Out To Be Bad Business ".

Open your mind a little and relax, you'll live longer.

The thing that people find disgusting about what I say is that it is real you know. There is nothing more disgusting and disturbing than the truth... But you either have to live with it or lose.

The thing that people find disgusting about what I say is that it is real you know. There is nothing more disgusting and disturbing than the truth... But you either have to live with it or lose.


As UH-MATT stated in your other thread, your WRONG! once again, however, you are entitled to your own opinion. What is disgusting is your attitude, personality and character. Yea, he drives a porsche, and you are saying he could drive 25 Ferraris. Does he need 25 Ferraris?

I feel sorry for you and for whoever has to marry you. You will be one awful husband to have. If I were your wife, i'd be horrified to sleep beside you at night. Who knows what you'll try to get my insurance money. I think you should take some of that 10K you make a month and seek some mental help. I'm not sure if the others see what I see in your Character.

I'm not trying to come off as rude or offensive, however, the sooner you realize your problem the better for you.

Originally posted by thomas.smith
. . . So I'd really appreciate if in the future you guys would act a little bit more intelligent in regards to this, ok ? It is just for your own good.
It's a funny biz we're in. I know with HTTPme, I started off hosts who now have 10+ servers. So in essence, I was breeding my own competition. I keep in touch with a few of them, and trade tips etc. There's no feeling of competition there at all.

But the market is huge and vast that I'm not effected by that. Someone has to start those hosts off, and it may as well have been me.

>I feel sorry for you and for whoever has to marry you. You will
>be one awful husband to have.

I'm not asking you to marry me !! I am asking you all to stop destroying the little piece of the cake in this business that is left for us to share.

Originally posted by Aussie Bob
It's a funny biz we're in. I know with HTTPme, I started off hosts who now have 10+ servers. So in essence, I was breeding my own competition. I keep in touch with a few of them, and trade tips etc. There's no feeling of competition there at all.

But the market is huge and vast that I'm not effected by that. Someone has to start those hosts off, and it may as well have been me.

You built that business and sold it so I guess you do not have to be afraid about not beeing able to pay your rent. But I do because I haven`t yet "cashed my chips". That is why I am really concerned about my piece of the cake. If I had like 500k to a million I wouldn't be concerned about anything...but until then...

Originally posted by thomas.smith
. . . I'm not asking you to marry me !! I am asking you all to stop destroying the little piece of the cake in this business that is left for us to share.
It's ok Thomas. Deep breaths now. Breathe in . . . hold one two. . . and breathe out . . . .

There's still enough cake out there with these nasty hosts selling reseller accounts and dedicated servers. :)

Thomas, it is definitely time for a vacation. :stickout:

I find it hilarious that 90% of your posts here are requesting advice on how to run your company or deal with your customers, then you turn around and badmouth everyone giving you free advice. I'm curious where you would be without WHT.

The hosting market is enormous. If another 1,000 hosts spring up tonight, it's not going to affect my business or yours one bit. Why? Because there are millions of sites out there that need hosting and far less web hosts. My customers aren't going to jump ship when they find another host 20% cheaper than me. They would have done that a long time ago if price was the deciding factor, but it's not.

You're completely wrong about reseller accounts. Hardware costs nothing. You can get 200GB hard drives for around $100. That's 100 2GB reseller accounts. SUPPORT is what costs time/money. On a $35/month reseller account, I am supporting one customer. On $35 worth of shared hosting, I have to support 7 customers. The reseller may get an extra 250MB over the 7 shared accounts, but my cost is way way WAY lower. I'll take the reseller any day, thanks.

This industry is not a little piece of cake. It's a cake the size of Texas and there is plenty for everyone. It's ok to share your cake. :)

It's ok Thomas. Deep breaths now. Breathe in . . . hold one two. . . and breathe out . . . .


Hahahaha :emlaugh:

If your claiming to make $10K a month that's $120,000 a year which is some really good money considering you are to greedy to hire someone to help you out. So, you are pocketing $120K a year, stop whining. This should be moer then enough to pay the rent.

Anyways, it doesn't seem like you have any goals or plans on making this money for your future children. Wouldn't you want to give your children a better life then what you had/have. I think you just want to have those 25 Ferraris and 10 girls in bikini's serving you food all day However, it should be evident that you have no intentions on having children with such greed.

Money does not bring happiness, satisfaction or peace at mind. It may make you happy for awhile. Nevertheless, in the end when your sitting in your hot tub you will realize you have no one to share your wealth with, everything will seem pointless. Big deal, you'll die with $10million in your bank Hurray!

Originally posted by Aussie Bob
It's a funny biz we're in. I know with HTTPme, I started off hosts who now have 10+ servers. So in essence, I was breeding my own competition. I keep in touch with a few of them, and trade tips etc. There's no feeling of competition there at all.

But the market is huge and vast that I'm not effected by that. Someone has to start those hosts off, and it may as well have been me.

You just have to learn to grow with them not against them.

There are hosts that started off with me as resellers that now have over 10 servers of their own, but their 10 + servers they have are leased from me. ;)

Someday they will be ready for colo and when that time comes I intend to be there waiting to supply them with that also.

Instead of worrying about competitors learn to leverage it for your own growth, lots of oppertunity out there if you supply a product that is needed.
It is only a problem if you limit your yourself, if your dad had of seen the demand he could sold the books wholesale to the guys that he told about it and still made a mint. Instead he got greedy and always wanted to make $40.00 one book at a time.

Besides I get a kick out of seeing a someone start from ground up and grow something.

Instead he got greedy and always wanted to make $40.00 one book at a time.


That's what will happen to thomas. I guess the saying is true: "like father, like son" he was born to be greedy.

First of all I am not pocketing 120k a year. That is revenue. Not profit and I am spending most of the money on advertising. I will need to outsource the support now as I can`t handle it anymore. However, even if I made 120k a year: What if the business breaks down in two years ? I would not have enough money for the rest of my live.

Originally posted by thomas.smith
First of all I am not pocketing 120k a year. That is revenue. Not profit and I am spending most of the money on advertising. I will need to outsource the support now as I can`t handle it anymore. However, even if I made 120k a year: What if the business breaks down in two years ? I would not have enough money for the rest of my live.

Sell now take $80 grand or so and go invest in the stock market.

With all due respect I think you need to go lie down thomas. Your not making any sense and with views like your's your probably best of not in the hosting industry, for your own sake.

What if the business breaks down in two years ? I would not have enough money for the rest of my live.


You are not capable to work any other job like 85% of the population? do you not have any other traits? and trust me, if you have to flip burgers to survive you will. Stop creating bs scenarios.

Anyways, I will not waste anymore time with this. Take care and please do learn to share.

thomas.smith: being so greedy isn't good. Don't get me wrong, I am quite greedy myself. I think money DOES help make a person happy, and I want to have nice cars, etc. But you have to realize that giving people bad advice because you are scared of their potential is wrong. If I was a mod, you would get tapped with my ban stick. If you can't be nice and help others, then why should you be allowed to receive help?

Originally posted by thomas.smith
First of all I am not pocketing 120k a year. That is revenue. Not profit and I am spending most of the money on advertising. I will need to outsource the support now as I can`t handle it anymore. However, even if I made 120k a year: What if the business breaks down in two years ? I would not have enough money for the rest of my live.

I think that a larger problem in this industry might be hosts who spend more money and time on advertising than on customer support, get overwhelmed by it, have a nervous breakdown and leave all their customers in the dark. If you have as many customers as you claim, you should be more concerned about them, rather than your competition.

"Most" to me means at least 75%. If you're spending 75% of $120k on advertising, and not making ten times that amount in return, what the heck are you doing?

I am not in the hosting business, so this is my take:

Yes, having a discussion forum like this will encourage competition. Newbies come in (maybe one day I will do a hosting business just for fun from the knowledge I learn here), grow, and maybe outgun you one day. Don't say "I am not afraid of the newbies". Everyone start new and small at some point. Whether they can eat your pie depend on how good they are and how good you are.

However, the free information exchange makes the industry more efficient. As a whole, this industry is able to offer better service at lower cost because of this, which enables more people to become customers. Without the free flow of information, you will have much smaller pie to compete for and the cost is higher for everyone (for you too).

And, if the kind of business is profitable, you will have competition anyway, whether you tell people "come on in", or "don't do this, you will lose your shirt". This is called capitalism. The free information ensures that at least everyone has a good understanding about the realistic risk and reward, so nobody do something extremely stupid to mess up the pie. For example, I don't see anyone suggesting "offer $2/month plan and you will make a lot of money" to the newbies. Instead, the experienced always recommend against competing at the low end. Those who cheap prices won't make money for the owner, and mess up everyone elses' business. I am pretty sure without this forum and sound advices here, you will get way more low priced competition from the inexperienced simply because that's the most obvious way.

By the way, Justin, according to thomas.smith, you shouldn't tell him that it is not a sound business that the advertising take so much of his revenue. ;-)

Without the advertising I'd have 10, maybe 20 customers... My business is set to pay off on the long term. I can stop advertising at any time. But then why would you earn 10k if you can make it 100k a month ?

It would all depend on if your quite happy with 10k pm of customers and that is what you can comfortably handle or not.

Or how many debts you had to clear :)

My carreer progression was debt driven for years, if it wasnt for debt i would still be in low level tech job :)

So, anyone know thomas' website URL?

I'd love to see what all the worry was over :)

Consider it like this: If you found a piece of gold in a mountain would you run down to the next village and scream: GOLD, GOLD !! Or would you look for more gold on your own and see what you can get for yourself ? To me it seems like the gold rush makes people blind and instead of keeping the gold for themselves they run around like crazy and tell everyone what they have found because they are so happy about that piece of gold and this way they miss a whole mountain full of gold... That`s not very intelligent.

Originally posted by thomas.smith
Without the advertising I'd have 10, maybe 20 customers... My business is set to pay off on the long term. I can stop advertising at any time. But then why would you earn 10k if you can make it 100k a month ?

I think you are missing all the points presented to you in this thread.

You need to either get with the program and realize that in this multi-BILLION dollar industry, there is definitely room for competition, niche markets, etc. or get out now with whatever sanity you have left!

If you are only getting a few customers without advertising, you need to look at your overall setup.

At present, I am running zero advertising and signups are flowing normally just from word of mouth from my current subscription base. Obviously, advertising doesn't hurt and I'm about to start back up a few campaigns, but the point I'm trying to make is that you don't have to invest all of your revenue into advertising to try and beat out the noobs and hosting giants.

I'd suggest you find the market thats right for you or sell off now before you give yourself a heart attack.

I am getting customers from word of mouth, too. However, what I meant was if I had never spent any money for advertising in the first place.

You can list your company in well over 100 hosting directories with no money.

I started out several years ago with a small reseller account and zero advertising dollars, didn't turn out bad afterall.........

I, too, am very curious to see the website of Thomas' business.

>You can list your company in well over 100 hosting directories
>for no money.

That is not gonna bring you a lot of customers... Maybe like one in a week which equals nothing in my oppinion.

Well, you're wrong in my opinion but I'm going to leave it at that as you aren't embracing any of the very productive feedback you've been presented with in two different threads.

I am asking you all to stop destroying the little piece of the cake in this business that is left for us to share. If you have been in this business for more than a year or two and are still going after the same clients that a "newbie" startup host is, then you are already destroying yourself. On top of that, if you've been in the business for quite a while and seriously worry about losing customers to startup hosts, then you are probably not servicing your customers very well and are simply reaping what you've sown.

If you sell a commodity, then you are at the mercy of the market pure and simple. If you (think you) sell a service, yet anyone with a reseller account can provide the same service you do, what kind of service is that?

If you found a piece of gold in a mountain would you run down to the next village and scream: GOLD, GOLD ? Some of us actually see our customers as people, not as shiny chunks of metal buried in dirt.

If you found a piece of gold in a mountain would you run down to the next village and scream: GOLD, GOLD ?

If I couldn't rent enough U-HAULS to carry it away, I'd sure go recruit some helpers and give them a cut.

I do not fear to lose customers. But I would like to keep gaining more business.

I don't think it's necessarily greed. Protecting trade secrets or business practices is a good thing. I can understand the frustration when you do something a certain way that works for you, your competition catches onto it and then they tell everyone and thier dog about it. The sense from the customers becomes, "Hey, why don't I do that to!" This is just compounded by the fact that any 12 year old with 10 bucks can be a web host.

I get asked for advise all the time on building DC's or managing colocation and dedicated server customers. I happily give it... to a point. I don't discuss costs or where we aquire our equipment from (Maybe those Dells came from Dell and maybe they didn't. :) ) I definately don't discuss financials except to tell people who want to loan us money or invest that we are debt free and don't need a loan and that we have no investors and are not considering any at this time. We have several projects in the works that the principals don't even speak of inside the office for fear of being overheard.

On the other side of that coin. Feeding a competitor is not all bad as long as you are getting something in return. We have peered with several local, single homed providers in the past. This bolsters thier network by giving them diverse paths and makes them better able to compete against us, however, it does the same on our end. In addition, good relationships with your competitors can lead to new opportunities for you. Maybe some of them like to talk and you can get in on thier secrets also. :)

Aaron

>If I couldn't rent enough U-HAULS to carry it away, I'd sure go
>recruit some helpers and give them a cut.

That is not what I am talking about... I am talking about telling others to get more competition. Employing staff and paying them...ok ! But trying to get more competition is just dumb.

someone change thomas.smith's account to chicken.little :)

Seriously, I'm not going to tell you to ignore your competition. Some people tell you to simply worry about yourself, your product, and things will take care of yourself. This isn't utopia and it's not that simple. But realize that in this industry, it's so huge, with so much room for niche markets, that you don't need to be up in this big of a fuss.

Also, there are certain tips and such that I won't divulge. Most people around here don't go giving away mission critical information that would give them a competitive advantage. We mainly give nudges in the right direction, or areas where they can educate themselves.

>But realize that in this industry, it's so huge, with so much room
>for niche markets, that you don't need to be up in this big of a
>fuss.

The browser market is big. The operating system market is big... The industry that Wallmart owns is big. If a market is big that doesn`t mean that it is impossible to be oversaturated !

Sorry, I said I was no longer going to reply to this thread, however, it's frustrating to see such ignorance.


Some of us actually see our customers as people, not as shiny chunks of metal buried in dirt.



This quote is so true, and I hope some of thomas.smith clients are able to see this thread so they may get an idea of how he really views his clients. Nothing more than gold buried in dirt.

There is no point to even ask for his URL. He is too paranoid to give out his URL as he's afraid people here and around the world will create a plot on how to post "evil" "fake" reviews about his one man company. Then he will be left on the street, because he is not capable of doing any other form of work.

Lets see, McDonalds sells hamburgers, Wendy's sells hamburgers, A&W etc get my drift. However, they're all multi-million/billion dollar corporations selling the same product with some minor different services/niches.

Yes, the above is fastfood chains, nevertheless, the same applies to Internet Service Providers, Cell Phone Providers, Home Phone Providers etc.

All you need is a good 2 x 4 to wake up. And there is a difference between being greedy and worried about leaking sensitive information. Thomas.Smith is clearly greedy, malicious and starving!

You see thomas, you say 10K may be 100K, that 100K a month may be 1millionK a month etc etc. Once people start making money it's never enough. If your making 20million a year you want 40 million the next year and for sure this is your character. Nonetheless, you're too cheap to employee someone to work for you. I understand you have advertisements to pay for, however, if i'm not mistaken i believe there was a thread awhile back where you said you dont spend a lot on adds somewhere around 100-400.

Either way, with 10k a month I would employee someone for $1,500USD a month to work the evening hours give you time for yourself. Hire someone to work from 4pm-12am or 8pm-2am, whatever floats your boat.

The description of WebHostingTalk.com happens to be: "A popular web hosting discussion forum." The majority of the active portion of this forum is comprised of those who are webhosts and those who wish to be webhosts. Maybe this isn't the forum for you to be in. I see your posts all over and I continue to bite my tongue about the majority of them. I am a webhost, but I am also more than happy to help out anybody looking to get into the business. If you do not like to see hosts helping out start up hosts, maybe you should really go somewhere else instead.

Furthermore I wish you would really read the posts and replies that go on in this board before making the type of accusations presented in your first post.

Sure, why don`t you just offer the same as me but 20% cheaper

I almost NEVER see any reply to that. The majority of the replies are more like this:

Getting into the hosting industry is not an easy thing to do. The best thing for you to do is use the search button. Research what hosting is all about and get a small reseller account. Start hosting a few friends to learn the ropes. From there you can move up to a VPS and then a dedicated server. If you definatley feel you need a dedicated machine then get a managed one, it'll save you a lot of trouble.

I would also ventrue to say that the majority of the posts on WHT by far have nothing to do with just start ups. It's a review and technical forum before all of that. Your entire post is bunk and upsetting.

Looks really funny especially considering that when I visit him in 20 years he will still be sitting on 1 ton of these ****ing books.

That in itself shows what type of person you are in my books

But what if they will grow big ? One big competitor can harm you more than 100 reseller accounts will make you in 6 months.

What if they grow big? Many providers offer everything from shared to reseller to dedicated machines. Odds are that if they grow big you will still be making money off of them and they most likely will not be invading any of your market. Do you think ******, HostDime, etc... care about the start up hosts, or even the really big hosts? This is not McDonalds vs. Burgerking no matter how much you want to twist the words and make it seem like it really is.

I do not understand why people offer reseller accounts or dedicated servers (unless you own a DC, of course) in the first place. It simply doesn`t pay off. You make 20 bucks instead of 5 you are making from a normal customer but then this reseller is gonne take away 20 of the customers who would have paid you $5 each.

So only datacenters should offer reseller accounts and dedicated servers? You would rather purchase directly from the datacenters at hte prices they would be offering? When I worked at Arby's we had our regular small roast beef sandwhichs and then we had big ones called market fresh sandwhiches. We also sold fries and drinks. The cost of the fries and the drinks that we sold were less than the cost of the containers we put them in. Why didn't we just sell fries and pop then? Because people want sandwhiches, and if they want them, we are going to sell them what they want and make the extra money. If we don't do it, somebody else will.

People want dedicated servers, they want VPS accounts, they want reseller accounts, it is impossible for people to not sell them because somebody else will.

>you gain self worth and the satisfaction of helping people. Not
>everyone is a greedy ******* you know...

Great...what does that buy me ?

With the 2000 clients and $10,000k a month you keep bragging all over these forums you can buy yourself plenty to live happy. For the rest of us it buys us a piece of mind, a short lived good feeling, and an overall feeling of self-worth and value...

Think about it: Where do small hosts advertise ? Where do you advertise ?

In completely different places 85% of the time.

>P.S. 100 reseller accounts for 6 months is big money.

Well, maybe 10 to 15k. But what does a large hosting company cost you ?? Maybe multiple times that much.


Look around on these forums and the internet itself. People that are going to host with a small/medium host usually do. Those that are looking for a big name host with a big name host. I have hardly ever seen a thread about "so and so left me to go to HostDime, what do I do?". It just plain does not happen. Most of those big hosts get their business through simple advertising which is not going to be in the same place as a small hosts advertising anyways.

>I concentrate on my own business and own customer base
>more than I look and worry about the competition.

You are making a mistake here...believe me. I know you got a lot of customers and it doesn`t come from nothing but times change... Believe me. There are two things to determine how successful you are:
1. Your own strength
2. Your competitors strength

The better you are and the worse your compeition is the more money you will make in the end so that are the two things to focus on in business: Making yourself strong and keeping the competition weak. Look at Bill Gates: He realized that keeping the competition down is even more important than fixing your own bugs and he has tons of cash. Sounds extremely ****ed up but it is the truth.
[/QUOTE

Those things may be how you measure your sucess, but they are not how the majority of the people on this forum and in life measure their sucess. I have a brother making under 35k a year, he's happy as can be because he loves his job more than anything else. My girlfreind's uncle is Gordon White (ABC commercials...) and obviously has a much stronger pull on the competition in his market than my brother. Both would consider themselves to be sucessful.

My favorite sentence from that post was: The better you are and the worse your compeition is the more money you will make in the end. From your first post sucess is measured by your pull in a markte. Then you say that money is the all great and holy grail that people should look for. And that you determine how sucessful you are based on hte amount of money you make. But first you are saying it's all relative to the actual market you are in. You are running in circles with no clear thinking. Instead it looks like you are making up anything you can to rebutle to the posts of others to try and make your point seem more important and your status higher. Does that make you strong?

The other great part there was Look at Bill Gates: He realized that keeping the competition down is even more important than fixing your own bugs and he has tons of cash. Sounds extremely ****ed up but it is the truth.
[QUOTE]First of all I am not pocketing 120k a year. That is revenue. Not profit and I am spending most of the money on advertising. I will need to outsource the support now as I can`t handle it anymore. However, even if I made 120k a year: What if the business breaks down in two years ? I would not have enough money for the rest of my live.

It's all in your business plan that you wrote after reading the "How do I get started" posts through right?
You feel that Bill Gates has made all of his money because he uses closed source? Maybe it was because he first got the GUI going in computing and started a landmark company. You should really read up on the history of "How Bill Gates Got Rich" before making posts about him in that kind of demenor.

You built that business and sold it so I guess you do not have to be afraid about not beeing able to pay your rent. But I do because I haven`t yet "cashed my chips". That is why I am really concerned about my piece of the cake. If I had like 500k to a million I wouldn't be concerned about anything...but until then...

He also helped run it for a period of time, less we forget. At 80K a year like you keep going on and on about, shouldn't be long and you can stop being concerned.

Without the advertising I'd have 10, maybe 20 customers... My business is set to pay off on the long term. I can stop advertising at any time. But then why would you earn 10k if you can make it 100k a month ?

Stop while you're ahead. We're helping too many people to start up a new business here and soon they will overtake you.

I do not fear to lose customers. But I would like to keep gaining more business.

Putting your site's address in the sig or a post would help you get more business. Why do you refuse to do so?

That is not what I am talking about... I am talking about telling others to get more competition. Employing staff and paying them...ok ! But trying to get more competition is just dumb.

What happens when that staff you employes learns how your business works and copies your business model? You will be breeding more completetion as well.

And to end I will just leave a simple Etc... to cover the rest of the countless bases here. Post your URL Thomas, then we may respect your opinion a bit more.

The industry that Wallmart owns is big. If a market is big that doesn`t mean that it is impossible to be oversaturated !

Walk down the street, do you see successful ma and pop stores? I do. Has wal-mart killed specialty stores?

Just like I said. Niche's.

Very interesting thread.

thomas.smith, you're making $10,000 a month and you are worried about the competition? Want to trade places? :) I wouldn't be worried in your position. it sounds like you are already quite successful. It seems there are 2,000 people who decided to host with your company instead of finding a cheaper host.

If you are worried about your business going under in 2 years and you being left with $240,000, well that's quite enough for most people I know to suffice for a while. As mentioned, there are other jobs out there. But companies generally don't just go under suddenly without some mistake on the part of the owner. Worry about managing the business you have, and not what you'll do when it dies.

I'm only four months into this, but no matter if I'm making $100 a month or $10,000 a month, I still enjoy doing this and I believe there is plenty of room for me to grow.

Having seen thomas.smith post around these parts for quite a while now i've also felt the need to bite my tongue many times.

For example, he's claiming 2000 customers and $10k/month revenue..

In January he was claiming 1200 customers and that he only accepted paypal:

http://www.webhostingtalk.com/showthread.php?s=&threadid=364202

800 customers in under 4 months? thats good going, increasing revenue by over $1000 month-on-month based on $5/month accounts (thats $150k increase year on year!).

Don't know about you guys, but if a host was growing that quickly then i'd expect them to be good at what they do....

Now do a search for all posts by thomas.smith and see what sort of questions he asks on almost a daily basis.

>In January he was claiming 1200 customers and that he only
>accepted paypal:

I gained 400 customers in the last 30 days alone...But nobody has to believe it...

Originally posted by thomas.smith
>In January he was claiming 1200 customers and that he only
>accepted paypal:

I gained 400 customers in the last 30 days alone...But nobody has to believe it...

If you tell us where you're advertising and what you're advertising, we just may believe you ;)

Ok, sorry, couldn't help it... we know you won't spill the beans anyway.

Still very odd that you don't put your site in your sig.

Originally posted by WebOnce
If you tell us where you're advertising and what you're advertising, we just may believe you ;)

Ok, sorry, couldn't help it... we know you won't spill the beans anyway.

Still very odd that you don't put your site in your sig.

A little birdy told me that something fishy is going on, and the bird wasn't a pelecan.

Originally posted by justadollarhostin
A little birdy told me that something fishy is going on, and the bird wasn't a pelecan.

If that was a clue, then I completely missed that boat. :D

Originally posted by WebOnce
If that was a clue, then I completely missed that boat. :D

Not so much a clue as a definitive there is something fishy going on. A pelecan eats fish and always things something fishy is going on. I have just yet to meet such a sucessful host, or any other business owner for that matter, that would refuse the chance at free advertising to the exact type of market they are looking to make money from.

Originally posted by justadollarhostin
Not so much a clue as a definitive there is something fishy going on. A pelecan eats fish and always things something fishy is going on. I have just yet to meet such a sucessful host, or any other business owner for that matter, that would refuse the chance at free advertising to the exact type of market they are looking to make money from.

Exactly... look at me :D I can't seem to get enough text down there... LOL.

Understood now on the pelecan thing :)

Originally posted by justadollarhostin
. . . I have just yet to meet such a sucessful host, or any other business owner for that matter, that would refuse the chance at free advertising to the exact type of market they are looking to make money from.
There's several successful hosts on WHT who keep their business out of their sig etc. I respect their need for privacy, if they so choose. To sig or not to sig - either way, it's all good. :)

Originally posted by Aussie Bob
There's several successful hosts on WHT who keep their business out of their sig etc. I respect their need for privacy, if they so choose. To sig or not to sig - either way, it's all good. :)

Do they constantly brag about the number of clients and money they make almost weekly?

Well... one does ;)

Well, i'm not exactly in the web hosting market, but seeing how saturated the game server provider market is, I love competition, If you are stable in your market in terms of understanding the worth of your product, and actually providing a service another provider cannot provide, you end up winning all of the customers.

Also, competition is fun to work with, because your competition actually keeps you afloat in the sense that people get confused enough by choice that they simply just pick _someone_ and its still a win situation.

Well, I think this was a try at reverse psycology that went terribly wrong. It's very probable that thomas was trying to get everyone to think that hosting is a bad business to be in and therefore telling customers to go away, in turn going to his company for hosting.

Let the conspiracy theories commence!!! :)

you know, I totally agree... I have made a couple of remarks on here trying to help others and lately I think "why?" why am gonna help someone I don't know who is in direct competition with my business... for that matter why would any of you? Argur it up an down the wall any real business man would tell you it is pretty stupid to get on here and help a nbameless faceless person... who is competition.

this forum, in its inception, is a great and wonderful idea... sharing knowledge and helping the fellow man or woman.

from a business standpoint... its retarted.

Yes and no. What goes around, comes around. While your helping your competition your also marketing yourself, as other resellers and hostees will read this and be able to determine if they believe you are knowledgeable and capable enough to trust their business with.

Every post you make is a potential advertisement for yourself and your services.

Originally posted by justadollarhostin
Do they constantly brag about the number of clients and money they make almost weekly?
Not the ones I know, but each to his own. I'm not very judgemental these days. It's that, or I just couldn't give a monkey's donkey. :D

Thomas Smith is an agitator, guys.Take it or leave it.
Just do a search on the threads that he participates in.
Not necessarily a bad thing. It keeps a thread going.
and I do respect his honestly about his desire to have MORE clients.

Anyway I think that the market is saturated if we compare to 1997.
If you are talking about hosting on WHT, yes it is VERY saturated.
People who thinks that the industry is way too saturated just proves that they are focusing too much on WHT or just that they are not trying hard enough.
there are always niche markets (like the ever so lucrative local market which I am happily tapping into) for you to target before all your neighbors and their dogs knows about cPanel and decide to start their own hosting company, which is very unlikely in the first place.

I don't know what the heck we are talking about here. I'll host anyone's site any time. I will never turn a potential client down unless I am going to lose money from it or don't see any potential future gain from the client. Some times it good to give a little to make a stronger name for yourself.

I really would like to know what his Website is :D

Originally posted by corNIC
I don't know what the heck we are talking about here. I'll host anyone's site any time. I will never turn a potential client down unless I am going to lose money from it or don't see any potential future gain from the client. Some times it good to give a little to make a stronger name for yourself.
We turn clients down daily as all accounts are screened and if we find a customer is a spammer we turn them away.

Originally posted by thomas.smith
I gained 400 customers in the last 30 days alone...But nobody has to believe it...

Don't worry you are in no danger of being believed. How does 400 customers in a single month equate to this opening line from you -

"Although this market is oversaturated like hell you still get some customers."

400 customers in a month is oversaturated? The two perspectives are incompatible and we all talk from our perspective. You gave it away there.

Heres why the hosts here are not afraid of sharing with a newbie getting into the market - They are in no danger.

They will always have more reputation
They know their niche.
They've invested in their business to make them distinct
and most don't compete on price alone so you undercutting them doesn't hurt them

Beyond everything else I don't believe you because you don't understand what any established host does - reseller hosting is profitable. Accounts that sell accounts are more stable than accounts that just host a single $4 account. Retention rates are better, support per site tends to be lower and you have more savvy customers in the reseller market.

>Don't worry you are in no danger of being believed. How does
>400 customers in a single month equate to this opening line
>from you -
>"Although this market is oversaturated like hell you still get
>some customers."

Well, I did gain 400 customers and yes, I still believe this market is oversaturated. Who knows how many customers I would have gotten if there were half the amount of hosting companies ? Who knows how much I would have had to spend on advertising ?

But as I said it is really up to you whether you believe me... I don`t care.

Originally posted by thomas.smith
> Who knows how many customers I would have gotten if there were half the amount of hosting companies ? Who knows how much I would have had to spend on advertising ?

But as I said it is really up to you whether you believe me

Yes it is and No matter how many times you write it I won't believe it especially when you follow it up by making such a stunning business analysis as - If I didn't have competition Imagine how much money I would make.

Might as well go to sleep and start a business there (in your dreams). or as the old proverb goes - If wishes were horses all beggars would ride.

This is closer no doubt to the truth - You are a struggling host thats probably having problems signing 10 customers a month. Its alright. Things can get tight sometimes. No crime. No foul.

Yeah, whatever...

Originally posted by thomas.smith
Yeah, whatever...

What is your website? :)

I won`t tell... too paranoid... :D

Originally posted by thomas.smith
I won`t tell... too paranoid... :D

Uh huh sure.... ;)

Originally posted by thomas.smith
I won`t tell... too paranoid... :D

Maybe http://www.ebay.de? search for "hosting" ?

very funny... NOT

Nah, he thinks we'll just take his priving plans and cut in on his customers :)

IIRC, He was mentioning how he consistantly has 100+ tickets in his support queue... I dunno about you guys, but I don't want that market :)

I've had 5 tickets this month... whew... it's been busy ;)

During the last 6.5 hours I answered 110 tickets... No joke !

You don't have to pay to support those reseller's clients. And you generally have one large account @ a higher price to deal with rather than a bunch of small ones.

>You don't have to pay to support those reseller's clients. And
>you generally have one large account @ a higher price to deal
>with rather than a bunch of small ones

There are also a lot of difficulties connected with reseller accounts: How to deal with AUP violationes, What do you do if one of the account uses too many resources. Ok, you can have your TOS protect you against this but whenever you suspend a certain site you must be afraid about losing the whole reseller... + resellers don`t really pay much. If a reseller pays $20 per month but getting this clients costs you 50 times as much as getting a $5 customer... see what I mean.

Originally posted by WebOnce
IIRC, He was mentioning how he consistantly has 100+ tickets in his support queue... I dunno about you guys, but I don't want that market :)

I've had 5 tickets this month... whew... it's been busy ;)

Agreed! I'm lucky to get 1 support ticket a month...

>Agreed! I'm lucky to get 1 support ticket a month...

With how many customers ? 2 ? 1 ? None ?

Originally posted by thomas.smith
During the last 6.5 hours I answered 110 tickets... No joke ! You got in 6.5 hours what our entire company gets over 2-3 days. That's supporting 3,500+ business websites. :)

- John C.

>You got in 6.5 hours what our entire company gets over 2-3
>days.

No, I didn`t receive them in that time... I just answered them during that time. I do not provide support at night and I was extremely overwelmed during the last days and some emails ended up on the queue. I am usually getting around 2 to 6 emails per hour. Maybe 60 to 80 per day. But that is only after months like this because I just gained those new customers. If I stop to do ad campaigns I get much less emails. Maybe 20 per day. But if you did just add 400 customers and 200 the month before that...you are really busy because new people want to have things explained.

Originally posted by thomas.smith


With how many customers ? 2 ? 1 ? None ?

I'm not going to give you an exact number, but it is plenty more than 2.

>I'm not going to give you an exact number, but it is plenty more
>than 2.

ok, great...

Originally posted by thomas.smith
>You got in 6.5 hours what our entire company gets over 2-3
>days.

No, I didn`t receive them in that time... I just answered them during that time. I do not provide support at night and I was extremely overwelmed during the last days and some emails ended up on the queue. I am usually getting around 2 to 6 emails per hour. Maybe 60 to 80 per day. But that is only after months like this because I just gained those new customers. If I stop to do ad campaigns I get much less emails. Maybe 20 per day. But if you did just add 400 customers and 200 the month before that...you are really busy because new people want to have things explained.

But not overwhelmed enough to take time out of supporting his millions and millions of customers to sit and argue with everyone on WHT. Or maybe he is so overwhelmed because he spends his time here arguing?

Well, 5.25 posts per day... Most of them just two lines long... Doesn`t take me too much time.

Originally posted by thomas.smith
>You got in 6.5 hours what our entire company gets over 2-3
>days.

No, I didn`t receive them in that time... I just answered them during that time. I do not provide support at night and I was extremely overwelmed during the last days and some emails ended up on the queue. I am usually getting around 2 to 6 emails per hour. Maybe 60 to 80 per day. But that is only after months like this because I just gained those new customers. If I stop to do ad campaigns I get much less emails. Maybe 20 per day. But if you did just add 400 customers and 200 the month before that...you are really busy because new people want to have things explained. Then your business model may be flawed if the amount of business you bring in in such a short period of time overwhelms your ability to support them. You can: increase prices to slow signups, hire more people to handle the volume, or work even longer hours to keep it all going smoothly.

400 in one month many times represents our net yearly intake of clients, but I'm guessing that our profit from these 400 differs from your profit tremendously, so the resources available to you to manage them is less, hence the problem...

- John C.

I am going to hire more support guys. Clients are paying around $4 on average. Sure, there are companies that charge like 40 Dollars on average or something and if they get 40 clients with the same efforts as it takes me to get 400 clients they are making a better deal. However, my theory is that gaining 400 clients at $4 each is much easier then gaining 40 clients at $40 each.

Hello thomas.smith,

I just got 425 signups today and that's without a site, beat that!

Originally posted by thomas.smith
>You don't have to pay to support those reseller's clients. And
>you generally have one large account @ a higher price to deal
>with rather than a bunch of small ones

There are also a lot of difficulties connected with reseller accounts: How to deal with AUP violationes, What do you do if one of the account uses too many resources. Ok, you can have your TOS protect you against this but whenever you suspend a certain site you must be afraid about losing the whole reseller... + resellers don`t really pay much. If a reseller pays $20 per month but getting this clients costs you 50 times as much as getting a $5 customer... see what I mean.

I don't understand why you are so against reseller accounts. They are much more profitable than shared accounts.

AUP violations are handled exactly like shared accounts and your resellers better have a TOS/AUP with YOUR terms in it as well. A reseller leaving you because their own customer broke their own AUP is ridiculous.

Resellers pay whatever you charge them. If they don't pay much, it's your own fault. Mine all pay over $35 per month and I rarely ever get support tickets from them. Most of them are technically competent and know what they're doing. If you have problems with your ticket volume or low paying resellers, you have nobody to blame but yourself.

My google ads cost me 10 cents per click. If one in 350 people sign up, I break even on their first month. Resellers rarely change hosts unless there are problems with the host, so most are long-term customers. Cost of aquiring new customers isn't even worth mentioning since it's so low.

However, my theory is that gaining 400 clients at $4 each is much easier then gaining 40 clients at $40 each.

Wrong. Big time.

Hm... maybe you are right and I should get into the reseller business, too.

One thing I never liked about the reseller thing is that the return per server is rather low. I mean if you allow someone to host 50 domains and give them around 100 GB of traffic you could maybe host 10 or 20 resellers on a server or maybe 30 to 40 on a high end server. I mean you can`t really stuff 2000 domains on a single CPU server... So lets say you host 25 Accounts at $35 each that would be 875 Dollar per month. Now 600 shared hosting accounts at $4 each make 2400 Dollar per month. That means I get the same money but only administrate one server. Ok, I have to provide more support but does it really pay off ?

Originally posted by thomas.smith
Well, 5.25 posts per day... Most of them just two lines long... Doesn`t take me too much time.

Oh don't be so modest. You've been doing about twice that the last few days and your response time has been stellar. AT least 30 times better than the the tickets you had at the last half of your 100+ que. If only we were paying customers. We'd be singing your praises making it impossible to hide your hosting prowess from the world

Originally posted by demostorm
Oh don't be so modest. You've been doing about twice that the last few days and your response time has been stellar. AT least 30 times better than the the tickets you had at the last half of your 100+ que. If only we were paying customers. We'd be singing your praises making it impossible to hide your hosting prowess from the world

hahahahaha - where do i signup. if he is that responsive on a forum, i can only imagine the service.

Originally posted by thomas.smith
Ok, I have to provide more support but does it really pay off ?


Ummm, pardon me for pointing this out but aren't you now asking for assistance on the figures and the rationale of entering the reseller business.

May I quote you?

"If someone asks you whether it pays off you should say "HELL NO !!"

:emlaugh: :emlaugh:

and now here you are asking the same thing in the same words. This thread is hilarious but at least it brings us back on topic.

I'll take 25 high paying, technically competent, loyal, long term reseller customers over 600 low paying, high maintenance, jump-ship-at-any-time, trouble-causing, i forgot my password, FAQ skipping, everything for nothing, shared customers any day.

As my resellers grow, they make more money, which in turn makes me more money. It's in my best interest to support them and their businesses however I can. Give a startup host a year on a reseller plan and by their second year they may be ready for a dedicated server. After 1 year of great service with you, why would they go anywhere else? Your $35/mo reseller account just turned into a $300+/mo dedicated server. They'll probably need management ($$$), training ($$$), all kinds of custom jobs ($$$$$), etc. 6 months later they may be ready for another server.

Would you trade that client for a $4/mo client?

Although I loathe saying this, I'll agree with you Thomas on the reseller issue a little. I have never felt that the reseller market in the medium to high priced business hosting industry is a good one to get into for profit margin. Offering a discount on multiple accounts makes good business sense in my market, but giving away large space and resources for relatively low return all the while providing top notch support does not equal high profit margins.

I'm not saying catering to resellers is a bad model, but for me, there is not enough profit margin to justify it. Build up a small, higher paying, loyal customer base, and they'll help with advertising, remain with you for years, and the headaches will be lessened enough to enjoy life just a little....before the sky falls. ;)

- John C.

I've just been thinking about getting into the reseller market. Really just because I felt it'd be good to expand our services a bit. Basically I just took the higher shared packages, added a bit to the price (50% actually), and call it a reseller; plus I added one mmore package. I guess you have to be careful with pricing but I can see how it can be profitable.

Originally posted by JohnCrowley
but giving away large space and resources for relatively low return all the while providing top notch support does not equal high profit margins.

What makes you think you have to give away large space and resources? If you target resellers who want everything for nothing, chances are good that they'll be targetting shared customers who want the same. This is just begging for trouble. My primary reason for offering reseller hosting is to make more money by having to offer LESS support compared to shared accounts. Selling high bandwidth / high disk space reseller accounts in bulk for little money defeats the purpose.

Target resellers who know the value of good hosting and will offer the same to their customers. Otherwise you might as well stick with bulk low-cost shared hosting.

there is not enough profit margin to justify it

So justify it. You decide what your profit margins are - nobody else. Any hosting plan can be sold if you convince someone of its value.

Originally posted by Justin Reel
What makes you think you have to give away large space and resources? If you target resellers who want everything for nothing, chances are good that they'll be targetting shared customers who want the same. This is just begging for trouble. My primary reason for offering reseller hosting is to make more money by having to offer LESS support compared to shared accounts. Selling high bandwidth / high disk space reseller accounts in bulk for little money defeats the purpose.

Target resellers who know the value of good hosting and will offer the same to their customers. Otherwise you might as well stick with bulk low-cost shared hosting.
...
And this is what we do, albeit a little differently than WHT standards. Offering discounts on multiple accounts thereby allowing resellers to offer hosting to their clients while we make money on each account. I'm a big fan of this model, as it allows for both parties to profit, and does lessen support for us.

However, the other reseller model of here's XX amount of disk space, XX amount of bandwidth, feel free to add as many accounts as will fit in this space, is not one that I particularly like. I'm not saying it's bad, as many companies thrive on this type of setup, but I do not see long term profitability for a small host as compared to direct pay per account models.

But, don't listen to me, I am considered a dinosaur in today's hosting world, as we've been plugging away at this for 10 years now. ;)

- John C.

Originally posted by JohnCrowley
. . . But, don't listen to me, I am considered a dinosaur in today's hosting world, as we've been plugging away at this for 10 years now. ;)
Yeah, get with the times old man. :buck:

if it's too loud - you're too old! :emlaugh:

This thread is SOOO long that i did not bother to read more than first page...

and Thomas Smith is ABSOLUTELY right, he is so correct that you other's dumbness is almost profound :O

Competition...

Think about owning a kiosk in 5,000 people town.
You make from your kiosk well, say 25k per month.

You tell your friends, and 4 of them make a kiosk also closeby your
kiosk.

Now the same customers have 5 times the choice of which kiosk
they go into than before.

You end up getting 5k per month anymore, and close your kiosk as
it is not worth the effort anymore.

See?

Yes, internet is big place etc.
But think if there would be ONLY 1k hosts out there and you'd be one of them?
compared to the current like 50k...
That would mean 50 times the clients you have now by raw
mathematics.

and if there only would be 1k hosts, and your services are very good...
Assume that you are on services currently top 5% and having 50
customers, as others don't find you because there is so much
competition!

You would be on the top 5% still on 1k hosts, the top 50!
Apply the 80-20 law here, and said there is total 200*50k(hosts)
clients avail.
10 million clients that is.

from the 1k, top 20% takes 80% of the clients, you are there.:
8 million, and assume that it would be divided evenly (not justifying!) that would make 160 000 clients.

and 80-20 law reapplies and reapplies.
I'd say you'd end up somewhere around 150-200k clients then.

Now take on count the higher prices as there is less competition,
and price wars are less struggled.

Say before you would have made 5$ per customer, but as there
is only 1/50th of the competition, you've got 50% higher prices,
which is very conservative calculation (it would be more like 500%
the price in truth), 7.5$ per client, 160k*7.5$ is 1 200 000$ per
month... Now Think about it...

This is very basic mathematics of applied business laws.

As a side note, i'm currently getting IT-Industry Qualification in business and administration (IT QBA), in best Finnish college, if that even gives any worthiness in your eyes of what i say.
The thing that should make worthiness in your eyes of what i say is that fact that i've gotten by in hosting industry with next to 0$ advertising budget, and i'm very well in profit.
(in 2 years, i've spend into advertising approx 60€, that is around 80-90$).

Next thing you won't believe is that 80-20 law.
Examples: 20% of companies get 80% of the revenues & clients.

top 20% of richest people has 80% of the total financial worth of whole world etc etc. Just think this example as there is a lot of people living with like 1-2$ per day(contains everything, food, rent, clothes etc etc etc), like 80% of world's population live with that amount.
Google a bit and you should find some charts :)

and no, i'm not trying to troll here, but where is your brains?
Thomas is exactly right on the topic of competition being bad for your business!

More examples, look on the early days of hosting as there was not much of competition, look on the early days of whole computer industry, especially when PC game out, where was competition?
How did windows get to be the #1 OS? No Competition!
How did IE take the #1 place in browsers? No Competition! (They got rid of competition partially because shipping it with the OS and other's unability to deliver their browsers even nearly as easy!)


Look at ANY market with very low competition at early days, who got the #1 market place back then, who has it today.
Why you should aim to a niche? Because there isn't competition.

Now, think about what is the chance when you help someone out to get into hosting business that they would take hosting from you?
There is so much competition that it might be quite a slim, even how helpfull you'd be to them.

I've had that happened, one possible client was asking a lot of questions about reselling hosting etc. i gave him a lot of information & advices, and he let me assume he'd take hosting from me.

Suddenly he is never online on MSN, and one day he comes online and shows me his hosting page. He went for another company, and was back asking for my advice.
Guess did i help him at all anymore?

Fortunately he isn't any competition, site being template fuxored up with BIIIG red text, too long sentences making the template fuxor up, full of typos & grammatical errors, no support methods at all etc etc. So terrible work i can't believe someone is able to fuxor up so badly.


Now, your assignment is to go and take a piece of paper, write down CONS & PROS of having competition for your business, from your perspective, owner of the business.

I'm helping here too much already, but bashing tomas smith for being right got me so angry.

To the post above mine (too long to quote) I find it curious to see this link from you: http://interpreneur.artichost.net/

Best take that down right ;)

On a side note people in this thread generally aren't bashing thomas.smith for being right or wrong about helping the competition, they are bashing him for his general demenor and traits on this forum.

Originally posted by JohnCrowley
And this is what we do, albeit a little differently than WHT standards. Offering discounts on multiple accounts thereby allowing resellers to offer hosting to their clients while we make money on each account. I'm a big fan of this model, - John C.

I think that works for you because you have been in the business for 10 years. You've developed a certain amount of traction/reputation and I'll bet a pretty nice niche market but in the general market a savvy reseller is not going to go with a per account model. Not if he has ANY business sense. Those days are done (and I remember when that was the dominant approach) except in a few niche markets or among those who don't know any better.

Not a matter of being cheap since many will still pay $40-$60 per month for quality. Just a matter of knowing whats available. When you find out you don't have to pay for each long distance call within the US who would ever go back to a company charging for each call. MUCH better is available with equal or better quality. Same reason knowledgeable resellers will never accept a per account setup or eventually leave when they discover better. There are many quality bulk reseller hosts.

Number one cost in the hosting business is support. thomas.smith's analysis of income per box is not in the real world. If you want to calculate per box you have to add the support time of the accounts on that box. That includes the churn rate on a $4 per month account - the account setups to replace the accounts lost on the box.

Support is mostly about training (unless you have problems on your box) and its obvious that its easier to train one person than it is to be constantly training 20 or 30 on new accounts. Reseller business is both viable and profitable.

>I'm helping here too much already, but bashing tomas smith for
>being right got me so angry.

Thanks but don't worry... I got used to it. If there is one thing that people don't want to hear it's the truth because the truth is not that colorful, flowerful and peaceful as their imagination of how the world should be. This whole life is a war. You got to make your decisions and pay mercenaries to cover your ***, deal knowledge for knowledge with some other guys and then if you have luck you will get what you came for and if you don`t have luck you will just die on the battlefield. That's the truth... But who wants to admint that this life is an endless struggle ? Nope, whenever you say this people hate you because they hate beeing reminded of the truth that they are trying to forget about.

Originally posted by demostorm
I think that works for you because you have been in the business for 10 years. You've developed a certain amount of traction/reputation and I'll bet a pretty nice niche market but in the general market a savvy reseller is not going to go with a per account model.
And there's the clincher. We cater to the less savvy clientele when it comes to technology. Our clients tend to be great in their businesses (even the designer/resellers) but not with tech related hosting issues. That's why they choose us. We provide the support they do not want to deal with, but are willing to pay a higher price for this higher level of service.

Not if he has ANY business sense. Those days are done (and I remember when that was the dominant approach) except in a few niche markets or among those who don't know any better.
You are entitled to such a broad generalization, especially when you put the market in the commodity corner. It's not a they do not know better, it's a decision to choose a hosting company on more than price. We have many resellers with 40+ accounts who are more than aware of the other less costly offers out there (a few tried the grass on the other side and returned), but choose to stay with us because it suits them better, even financially.


Not a matter of being cheap since many will still pay $40-$60 per month for quality. Just a matter of knowing whats available. When you find out you don't have to pay for each long distance call within the US who would ever go back to a company charging for each call. MUCH better is available with equal or better quality. Works well with commodities, but if you put the service angle on it, it's not that cut and dry. Why do people go to financial planners like Edward Jones and Fidelity and pay $50-$75 PER trade, when you can go with ameritrade for $5 per trade? Because the service they receive from a full service broker suits their lifestyle better. If you have a hobby site or pennies are tight, go with the least costly. If you run a full design company or high volume ecommerce site, a few bucks for piece of mind is nothing. Same goes for the guy looking to invest $100 or the woman with $3 million in assets that need to be managed.


Same reason knowledgeable resellers will never accept a per account setup or eventually leave when they discover better. There are many quality bulk reseller hosts.
Yes, the bulk will go to the bulk model, which is fine by me. If we get 0.1% of the reseller market in this hypothetical scenario, then we are doing great. Since we do not focus on this market, the lower numbers are not a problem.

I actually do not mind being called obsolete or living in the past, as I find it a compliment. :)
We treat our company as a brick and mortar one that happens to be on the internet in the hosting industry. We buck the trends, use old fashioned service and support, and continue to grow in a shrinking market, but that's the old way. The new way can be found in the various threads peppered around here. ;)

- John C.

Originally posted by thomas.smith
. . . Thanks but don't worry... I got used to it. If there is one thing that people don't want to hear it's the truth . . .
You are not speaking "truth". There is little to no real "truth" in hosting. There's knowledge gained from differring perspectives, understandings and experience.

Don't for one second think you're speaking "truth" and anyone with a differing opinion is false/wrong. IMO, you're so far off the mark, it's not funny. Your scewed interpretation of the world does not represent reality, or "truth". That's just your reality, gathered from your life's experiences.

5 minutes ago you're asking every n00b question in the book, about running a hosting biz, and now you're lecturing the industry, based on your paranoid delusions, and claiming to know "truth". It's all a bit too much.

Good Post Aussie Bob. If anything Aussie Bob told the "truth".

As for this quote from thomas.smith


deal knowledge for knowledge with some other guys and then if you have luck you will get what you came for and if you don`t have luck you will just die on the battlefield.


I never see you dealing knowledge for knowledge. All i've seen so far is you taking/stealing other peoples knowledge for your cheap arse.

>I never see you dealing knowledge for knowledge. All i've seen
>so far is you taking/stealing other peoples knowledge for your
>cheap arse.

I have been fixing someone's overloaded server for free ! See:

http://www.webhostingtalk.com/showthread.php?s=&threadid=364645&highlight=crazy+load

He's a nice guy and I thought fixing his server won`t cost me much as he is not targeting the same market as me. So I do in fact give something back... But in the end the way I am is all part of my personal philosophy and if people can`t deal with that it`s their problem.

I should give a very big thanks to

(((((((((((((((thomas.smith)))))))))))))))))


He is one of the best around.
He was able to configure my problem and to solve it.

The load went down to around 0.5 after it was over 180

The server providers said that that the server looks normal
and that is the normal load!!!!!!!

Thanks again thomas.smith.
You are one of the best

You are entitled to such a broad generalization, especially when you put the market in the commodity corner. It's not a they do not know better, it's a decision to choose a hosting company on more than price. We have many resellers with 40+ accounts who are more than aware of the other less costly offers out there (a few tried the grass on the other side and returned), but choose to stay with us because it suits them better, even financially.

Nothing broad about it. If you notice I gave you the reality of the niche market. If your customers had left for good reseller hosts (of which there is no shortage) they would not be coming back unless you essentially match (or come close enough) the resources and quality of support for the same dollar (or near) dollar value. So there still was some ignorance there.

I also didn't put the hosting market in a commodity market as you allege. I clearly indicated quality of support and service being the same or better which makes your various analogies off the mark.

If I pay more money for less resources and the same quality of support and service then its a poor business decision based on ignorance or lack of business sense.

Again all bets are off if you have a niche where you povide unique services. More power to you but thats no reason to see a flaw in the reseller market in terms of profitability for small hosts without those niche services.

All hosts are going to claim superiority in service to all others. If they didn't they wouldn't have much pride but objectively there are too many reseller hosts with excellent service to make that argument compelling to the end user in the know.

Bottom line is what works for you works for you but its no indication of the profitability of offering reseller hosting. the evidence of hosts in the business is overwhelming and many of them started out small. None of the larger ones use your model or would have become large using it. It is a Good business.

Originally posted by demostorm
I think that works for you because you have been in the business for 10 years. You've developed a certain amount of traction/reputation and I'll bet a pretty nice niche market but in the general market a savvy reseller is not going to go with a per account model. Not if he has ANY business sense. Those days are done (and I remember when that was the dominant approach) except in a few niche markets or among those who don't know any better. I canned three different mass market reseller programs many moons ago- I'd rather have full retail Brand share, product delivery oversight, measurable market share and a loyal referral base- the foundation of a viable ongoing business- plus I think customers should deal with a primary provider, not a Tupperware salesman- the internet is about disintermediation, not adding middlemen. There are many ways to offset support costs, even when operating 2 different call centers and geographies- most notable is product quality- something that cannot be managed as a reseller Resellers just add to the clutter- I'm willing to spend an extra 30 or 40k a month in CAC and watch, but it's the customer experience and long term viability of reselling that concerns me. Lazy tier 1 providers (no not you John C) that were either incapable or unable to market to primary audiences changed their model and now rely upon reselling rather than the primary market- I'd much rather have a lower operating margin and COG In conjunction with a high rpu renewal rate any day. All it's going to take is a major shift in bandwidth upstream or the growing awareness of the consumer market to change the major reseller cost structure and take –rate and things will fall like a house of cards- Plus as the general consumer becomes more astute and aware of the reselling model-templates and tickets, non dedicated service etc- more will gravitate to primary providers- It’s little wonder that the market leaders- the 50 or so now that have 70k+ customers are all privately held primary providers with their own call centers, nocs and service architectures- Not resellers. They provide resold services, but the actual contribution percentage is abating annually-

[i]Reseller business is both viable and profitable. [/B] This is only germain to very small resellers in niche markets

Originally posted by demostorm
Nothing broad about it. If you notice I gave you the reality of the niche market. If your customers had left for good reseller hosts (of which there is no shortage) they would not be coming back unless you essentially match (or come close enough) the resources and quality of support for the same dollar (or near) dollar value. So there still was some ignorance there.
ok, I'm feelin' frisky, so I'll indulge...

Niche marketing is one key way for small hosts to differentiate themselves from the mass hosting market that is becoming commoditized. You cannot go toe to toe with 1and1, ev1, etc... as a small host, which 99% of the hosts here are small. And service is one way, especially when you employ only top notch support people that have high level education, experience, etc...
I also didn't put the hosting market in a commodity market as you allege. I clearly indicated quality of support and service being the same or better which makes your various analogies off the mark. ok, maybe I overstepped it a bit, but the bulk market is more like commodity trading, hence my "off-the-mark" analogy.
If I pay more money for less resources and the same quality of support and service then its a poor business decision based on ignorance or lack of business sense.And if I put my hand on a hot stove, I'll get burned. I'm not arguing basic laws of business. ;)
Again all bets are off if you have a niche where you povide unique services. More power to you but thats no reason to see a flaw in the reseller market in terms of profitability for small hosts without those niche services.Flaw? no. Harder road for the small host that is not established? Definitely. Not as much profit for a small reseller focused host as compared to a pay per account model focused on small to medium sized businesses? IMNSHO, mostly yes.
All hosts are going to claim superiority in service to all others. If they didn't they wouldn't have much pride but objectively there are too many reseller hosts with excellent service to make that argument compelling to the end user in the know.So service becomes a commodity, but I see it more as a niche... with toll-free support to top level techs, pro-active site monitoring and fixing problems on sites without being asked, consulting as part of the monthly fee, phone based training, etc...
Bottom line is what works for you works for you but its no indication of the profitability of offering reseller hosting. the evidence of hosts in the business is overwhelming and many of them started out small. None of the larger ones use your model or would have become large using it. It is a Good business.I'm not a psychopath thinking the rest of the world must be wrong because I am right (*cough* thomas *cough*), I'm just presenting an alternative to the rat race known as hosting. :)

- John C.

[i]Reseller business is both viable and profitable......... This is only germain to very small resellers in niche markets [/B]

Cowabunga, We were not talking about reselling or resellers we were talking about reseller hosting. Reseller hosting is not a niche market and reseller hosts can be primary suppliers

So service becomes a commodity, but I see it more as a niche... with toll-free support to top level techs, pro-active site monitoring and fixing problems on sites without being asked, consulting as part of the monthly fee, phone based training, etc...

I don't really know what you mean by commodity so I'll break down my understanding on it

-toll free support to top techs - selling point not a niche
-pro active site monitoring - expected on a certain level for all individual accounts - not a niche
-fixing problems without being asked - support premium not a niche
- Consulting as part of the monthly fee - thats a niche yes.
- Phone based training - again a niche

as an experienced person the first three would be translated to me as follows - blah, blah, blah , blah . Believe it when I see it - unless you have a stellar reputation I know of.

The last two are what distinguishes you and allows you to charge a premium but if you did that on a reseller account you could charge premium dollars too and train the reseller in such a way that you have much less support responsibilities - but as long as you charge me for each account I'm going to make you work for it. Or else after out of loyalty I stay with you a year and no longer need training I'll move on and improve my bottom line.

Generally agree with you though. its the added services and products you offer that determines your success with whatever model you choose. it s unbelievable to me that after all this time hosts are offerring mostly the same thing - space, bandwidth and the intangible (initially) of support.

Its really sad how often you see people who are allegedly in business searching around here for everything free. Very few want to invest the difference in time or dollars to compete on anything but price.

Originally posted by demostorm
Cowabunga, We were not talking about reselling or resellers we were talking about reseller hosting. Reseller hosting is not a niche market and reseller hosts can be primary suppliers You said "reseller business" which to me indicates both sides of the ball- for reseller providers to be “viable and profitable”- their customer’s need to be as well- my point is that resellers (99.9%)- the customers of reseller hosts (regardless of size) are relegated to success on a small scale in niche markets and are therefore susceptible to a host of failure options- Hosts which go to market solely to shared resellers are enjoying near term success, but none the less are beholden to what I believe is a short term model and risk singe point of failure through lack of market diversification

Originally posted by Aussie Bob

You are not speaking "truth". There is little to no real "truth" in hosting. There's knowledge gained from differring perspectives, understandings and experience.

Don't for one second think you're speaking "truth" and anyone with a differing opinion is false/wrong. IMO, you're so far off the mark, it's not funny. Your scewed interpretation of the world does not represent reality, or "truth". That's just your reality, gathered from your life's experiences.

5 minutes ago you're asking every n00b question in the book, about running a hosting biz, and now you're lecturing the industry, based on your paranoid delusions, and claiming to know "truth". It's all a bit too much. [/B]

Praise the lord Aussie Bob, praise the lord. I hate it when people claim to be "speaking the truth that people can't handle". Very, very rarely is that the case, and it's the perps easiest way of dismissing others ideas.

Originally posted by cowabunga
You said "reseller business" which to me indicates both sides of the ball- for reseller providers to be “viable and profitable”- their customer’s need to be as well- my point is that resellers (99.9%)- the customers of reseller hosts (regardless of size) are relegated to success on a small scale in niche markets and are therefore susceptible to a host of failure options- Hosts which go to market solely to shared resellers are enjoying near term success, but none the less are beholden to what I believe is a short term model and risk singe point of failure through lack of market diversification
There's a good market in the bulk reseller market. It's a product that has great demand, and if done correctly, can provide the reseller and main host good benefits/profits. I built HTTPme around such a model, and it was very profitable from a business standpoint.

I would not call the bulk reseller model a "short term model". It's an emerging model that threatens some existing models. There's no going back to the single account reseller model, and the demand for bulk reseller/multi-domain hosting is huge and fast growing, for obvious client benefits etc.

Each to his own. It's all good. :)

What an interesting thread.

I always enjoy posts from thomas.smith and JohnCrowly, so it is nice to see both in one thread!

lol. I can't think of two more diverse business philosophies.

Personally, my experience is more in the type of "high end" or premium business side. I can witness that there is a solid market around the need/desire for very high quality shared hosting. Customers who are eager to pay $50 - $200 per month for what thomas.smith sells for $4 per month.

The difference is that there are 1000 customers for thomas for every ONE customer for JohnCrowly. Same profit margins, just different customer numbers and business delivery.

Customers who pay a premium expect and demand a premium service. This is where most people here do not understand and they get tempted by the "dark side" of budget hosting.

If you truly offer premium high quality services with personal dedicated 1-800 numbers to personal technicians, account reps, personal training, etc.. (as outlined by JohnC), then you can indeed sell hosting for a large premium.

But you will NOT get very many signups. Business is slow to build. It takes a long time. And you must resist the urge to "be competitive" and go down that slope of trying to compete with people offering the "same thing" for less.

In a sense, this sort of level of business is a lot about establishing a BRAND and then selling that brand as a level of confidence and "least risk" to the customers.

Anyway... I've now been involved in both forms of the hosting business. I started as a partner in a high-end hosting firm, then got out of that and tried the "lower cost budget" method.. and now I'm moving back to the higher end of hosting again. Not the real high premium stuff I was involved with before, but somewhere in the middle.

That's what I feel is the sweet spot of the hosting business. High enough pricing to NOT require thousands of customers to make good $$, but so high that they expect us to drive to their house and teach their grandma's how to type.

As far as the "reseller" topic goes.. I think there is a good market for resellers, but not at the premium services level. Why? Simply because the very nature of a reseller means they are starting out and they can't afford premium level services that are consistant with the market I want to target.

Resellers, generally, are "starting out" and thus they lack the business experience to know that they get what they pay for, or that they think they can get the same service elsewhere, etc...

This is much different then the business consumer who simply wants to pay us $150 per month to make sure his website and email are always running and give him a dedicated 1800 number to someone who will always immediately answer the phone and knows this customer's business inside/out.

The hosting industry is a lot of fun! Such diversity is uncommon in other industries. I love it!

:)

Originally posted by mrzippy
. . . The hosting industry is a lot of fun! Such diversity is uncommon in other industries. I love it!
Yeah, too right! :gthumb:

Originally posted by mrzippy
...That's what I feel is the sweet spot of the hosting business. High enough pricing to NOT require thousands of customers to make good $$, but so high that they expect us to drive to their house and teach their grandma's how to type.
Thanks for the great summary! Right on target. :)

And to those who think higher priced hosting means being at your client's beck and call 24/7, it is actually quite the opposite. They expect the service to work at all times, for you as the host to provide what you say you will, and generally only call or email/ticket when they have a serious problem they cannot solve, and those calls/emails tend to be during normal business hours.

The beauty of the more serious client is they often know what they need, know the value of good service, and appreciate that good service. All this tranlsates into less support call and email volume than other types of hosting. At least this is how I've seen it play out over the years.

- John C.

[ and no, i'm not trying to troll here, but where is your brains? Thomas is exactly right on the topic of competition being bad for your business!

Poor soul. Its only your competing on price only model that is affected so you don't see the genius behind our madness. Helping other price only hosts into the market isn't an oversight -its a strategy

The more bargain basement hosts there are the better. We have a plan to flood the market with price only competing hosts and will inevitably force you into lower prices. Eventually to the point where already low service gets (if possible) even worse. We will help in any way we can because it creates a steady stream of refugee customers that swear themselves off of bargain basement hosts. They see the prices on your site and flee instantly.

The ultimate goal we are working toward is a proliferation of 50 cent a month hosts offering 20 GB bandwidth per day. After the dust clears we will declare victory and have a big party in the Keys (Florida), put all the cheap equipment on a raft and ceremonially send it across the straits to Cuba.

But you wouldn't know this devious strategy if you are not a member of the SSRH (Secret Society of Real Hosts) and I fear my honorary seat on the council is now in jeopardy for revealing it. Forgive me my brethren

Originally posted by demostorm
[

Poor soul. Its only your competing on price only model that is affected so you don't see the genius behind our madness. Helping other price only hosts into the market isn't an oversight -its a strategy

The more bargain basement hosts there are the better. We have a plan to flood the market with price only competing hosts and will inevitably force you into lower prices. Eventually to the point where already low service gets (if possible) even worse. We will help in any way we can because it creates a steady stream of refugee customers that swear themselves off of bargain basement hosts. They see the prices on your site and flee instantly.

The ultimate goal we are working toward is a proliferation of 50 cent a month hosts offering 20 GB bandwidth per day. After the dust clears we will declare victory and have a big party in the Keys (Florida), put all the cheap equipment on a raft and ceremonially send it across the straits to Cuba.

But you wouldn't know this devious strategy if you are not a member of the SSRH (Secret Society of Real Hosts) and I fear my honorary seat on the council is now in jeopardy for revealing it. Forgive me my brethren
Anyone entering the web hosting market should read that post. I agree 100%.

Cheers

Originally posted by demostorm
[

Poor soul. Its only your competing on price only model that is affected so you don't see the genius behind our madness. Helping other price only hosts into the market isn't an oversight -its a strategy

The more bargain basement hosts there are the better. We have a plan to flood the market with price only competing hosts and will inevitably force you into lower prices. Eventually to the point where already low service gets (if possible) even worse. We will help in any way we can because it creates a steady stream of refugee customers that swear themselves off of bargain basement hosts. They see the prices on your site and flee instantly.

The ultimate goal we are working toward is a proliferation of 50 cent a month hosts offering 20 GB bandwidth per day. After the dust clears we will declare victory and have a big party in the Keys (Florida), put all the cheap equipment on a raft and ceremonially send it across the straits to Cuba.

But you wouldn't know this devious strategy if you are not a member of the SSRH (Secret Society of Real Hosts) and I fear my honorary seat on the council is now in jeopardy for revealing it. Forgive me my brethren

Heheh, That is hilarious. I completely agree with you though.

Originally posted by demostorm
[

Poor soul. Its only your competing on price only model that is affected so you don't see the genius behind our madness. Helping other price only hosts into the market isn't an oversight -its a strategy

The more bargain basement hosts there are the better. We have a plan to flood the market with price only competing hosts and will inevitably force you into lower prices. Eventually to the point where already low service gets (if possible) even worse. We will help in any way we can because it creates a steady stream of refugee customers that swear themselves off of bargain basement hosts. They see the prices on your site and flee instantly.

The ultimate goal we are working toward is a proliferation of 50 cent a month hosts offering 20 GB bandwidth per day. After the dust clears we will declare victory and have a big party in the Keys (Florida), put all the cheap equipment on a raft and ceremonially send it across the straits to Cuba.

But you wouldn't know this devious strategy if you are not a member of the SSRH (Secret Society of Real Hosts) and I fear my honorary seat on the council is now in jeopardy for revealing it. Forgive me my brethren

Well... the cat's out of the bag now guys...

My opinion is hosting is not a Zero Sum Game, it is a growing pie. Enough biz for all serious hosts out there.