Hi All,

I got interested in this web hosting about a year back and have been watching a lot of hosts that are here today and gone tomorrow. [I have also seen hosts that have been here for a long time and will be, but this thread is not about them ! ;)]

I would like both users' and hosts' viewpoints on the reasons for this phenomnon

There are a lot of things , like not enough margin to stay alive, overselling, too many customers too fast etc., but I am interested in hearing from all

Thanks

Cheers
Balaji

It's like any business, if you have a bad business plan you will not last long.

Another reason is people might not get the rewards they expected straight away and give up. It takes time and hard work to grow your customer base.

People expect to make a quick buck without doing anything. Customer support, and uptime are the most important things you need to worry about, if you are going to succeed in this business.

It seems most of the cheap hosts are the ones coming and going, but not always. Anyway, here are some scenarios.

Scenario one: Someone who wants to get rich quick gets a Donhost or Fasthosts reseller account, sells unlimited disk space and bandwidth accounts, gets screwed by Donhost or Fasthosts, screwing their customers in return, and goes out of business.

Scenario two: Someone gets a reseller account from a better place like MCHost or Splash Host, sees everyone else offering too much for too little, oversells too much to compete, either loses tons of money or doesn't make enough to make it worth it, and goes out of business.

Scenario three: Someone gets a reseller account from a cheap host, becomes successful at first, but then their host either has severe growing pains or goes out of business, putting them out of business.

Scenario four: Someone gets a cheap dedicated server, offers cheap accounts, becomes successful at first, sells more accounts, and eventually has more customers than they can handle but aren't making enough to hire more support, so customers get angry and start leaving, and they decide it's not worth it anymore and close shop.

Scenario five: Someone gets a more expensive dedicated server, sees everyone else offering too much for too little, oversells too much to compete, loses tons of money, and goes out of business. This is the dedicated server version of scenario two.

Scenario six: Someone gets a more expensive dedicated server, offers more expensive accounts, has trouble finding customers, doesn't have enough money to keep it going, and goes out of business.

Scenario seven: Someone starts a web hosting business, becomes moderately successful, decides to change their objective or career, and either sells the company or closes shop.

Businesses that fail go out of business because of lack of planning and lack of funding. Some businesses have good business plans but not enough money to make it work. To run a business, you need money. The more money, the better. Too many people try to start a web hosting company with not enough money. Many people also don't think about their expenses, so they have less money then they think they do. Other businesses have the money, but it's not worth the time they have to spend to make that money. People want to become successful too quickly. Greed starts taking over common sense. It takes time to build a good business, and a little good luck never hurts either. Some people just get really lucky and become successful even though they do all the wrong things. You shouldn't rely on luck. If you want to rely on luck, play the lottery.

Kudos ToastyX!

A very lucid and fairly comprehensive post. One more scenario is have a good business plan, have enough admin skills, have money but go and get server from a cheap provider with lousy network and moronic support and downtime kills all business.

But the common denominator out of all combinations, it occurs to me, boils down to:

1. cutting corners when procuring [expecting too much for too little]

2. selling what you do not have [overselling, aggressive sales commitments]

3. not having a back-up plan

4. expecting overnight results

and as you all said - not having a business plan.

So dont you all think hosting customers should be scared of plans that offer 20GB for 8$ as much as the "unlimited plans" ?

Cheers
Balaji

I totally agree with everyone here but no one has yet to STRESS the meaning of planning, other than a business plan. Planning in regards to to real-world scenerios. I think anybody trying to be a host withour their own equipment, bandwidth, and individual contracts is just going to fail, end of story. To be a host you need to be your own, do your own, on your own and make your own paths. When we started our cost was as low as $5 but we could do it because we have two locations, two data centers and three Internet pipes. We spent three years working on programming our own control panel, building our business, and finding the right people, etc. I see hosts all the time come and go just because they have bought a fresh new server with CPanel and BOOM there off. I think another point to be stressed is that a hosting company is by no means going to make it on just hosting alone. You have to offer other value-add services/products to enhance.

// edit: //

In this business you can't be a follower you have to be a leader in all your own ways.

Personally I think hosting plans are undervalued.

Everyone has brought up some valid points and ryank apart from balaji on the notion of proper business planning, has hit the nail on the head. Basic principals of economics would suggest in this market segment that too many players offering the same type services in the same format often leads to failure.

How do you then compete in a saturated market, if the intent is to compete ?

Differenciation....and diversification by product and service types and offerings.

Each player has to find how to do this, as that is the edge that creates the difference if success and growth in market share is to occur.

Originally posted by ryank
. . . . . I think anybody trying to be a host withour their own equipment, bandwidth, and individual contracts is just going to fail, end of story. . . . . :eek: Now, to be a host, you have to have your own data center?

Originally posted by SoftWareRevue
:eek: Now, to be a host, you have to have your own data center?

I didn't say you had to be a host with those things, I said that if you did have them chances are against you. Why you may ask? Well it's all about tiers. If your relaying on a company above you what happens if they have network problems or server issues, your a customer but you have to work through more red tape than if you actually owned the equipment and the space there are located. It's all about control. I'm just saying that it's more difficult to run a hosting company when your just a customer of a larger hosting company. Again this principle isn't compatible with everyone, maybe some people don't want to make it big, but for those who do this structure will only work if you own and manage your own equipment.

It's like wanting to buy a car but just renting one from AAA for 3 years. Is it cost effective, no. What about warranties, well you don't own it so AAA has to deal with it, etc. See my point? It's not the perfect illustration but it gets it across.

Originally posted by ryank
. . . . . It's like wanting to buy a car but just renting one from AAA for 3 years. Is it cost effective, no. What about warranties, well you don't own it so AAA has to deal with it, etc. See my point? It's not the perfect illustration but it gets it across. Right. If the damn thing breaks down; AAA fixes it. Which does make it cost effective. Even more manageable; because you don't have to allcocate staff to locate a service garage, estimate repairs, deliver the car, pay for the repair, pick up the car, etc.
And maybe the plan was to rent a car, bank the money you saved, pocket the money you earned while using the car in your course of business, then purchasing a new car with your well earned money.

I guess then; I don't see your point.
For your point to be valid, you would need to be in control of everything. And, if you didn't own every piece of pipe and the many other things needed to gain quality server access, you'll never be in control.
You'll always depend on someone up stream.

Your correct SoftWareRevue but each Tier that you go lower you end up loosing more control, you will never be in full control, agreed, but I'd rather be at Tier 2 than Tier 3 or 4 when something goes wrong.

And my point about the car can be argued but the point is AAA (man this is getting off-topic ;), my fault) is just another tier to the manufacture, red tape is red tape in business, AAA just doesn't fix the car it has to go through other means, thus you have to wait before those are accomplished.

Again, the rule doesn't apply to everyone but to succeed you can't follow, like stated in my previous post, you have to be a leader.

Just because AT&T owns the backbones and bandwidth and do a great job managing them doesn't mean they'll be just as good in the web hosting sector. Didn't they sell their web hosting sector to someone? Maybe I'm thinking of Dell.

Likewise for the datacenter we're in -- the network is outstanding, the guys know exactly what they are doing but do they do anything with web hosting? Na, they refer to one of their customers. They just deal with the networking.

Will we ever finance and build our own data center? Why? So we can hire more network engineers, pay more in rent and pay more on staff to manage the place? I'd rather pay someone to do all of that for me. :) Will we fail because we don't own the data center or the pipes? Probably not. If we don't like the DC or BW, we move. Do we have less control? Yes, but who controls bandwidth? Only a few select players. There's a bunch (read: whole heck of a lot and then some) of successful web hosts out there who likely won't fail as long as the industry as a whole stays together. True, the further down the food chain, the more people you have to depend on, but make good (and _wise_) choices and your likelyhood of success increases.

Just because you own a DC or you own the bandwidth doesn't put you in a "more likely to succeed" chapter. The ones who are likely to succeed are the ones with solid plans, a good amount of money, and a good management staff that is ready to put in the time necessary to build the company. Any problems with either of those and you're not "as likely" to succeed.

It's not the perfect illustration but it gets it across. For us the better illustration goes something like this....

It's like renting a home and finding out the owners sold it out from under you.... hence, you now must move.

Or...

It's like renting a home and the owners raised the rent -- by triple -- when you were least prepared for it... hence you have to move...

Or...

It's like renting a home and finding out the owners didn't make their mortgage payment (who knows what they did with the rent money you sent them) and the house was repossessed...hence you have to move....

Or....

It's like renting a home and everything is "broken" leaving you in unsafe living conditions...and/or spending so much time in court trying to make them safe it becomes not worth it..hence you have to move...

Then.. there's "that other option" which is owning your own home!

Now, all of the care is up to you -- BUT -- that means you can get it done and you know what's going on ;) The investment is yours to build upon rather than rent money lost in the wind for a location that could end up the same way...

For some people renting is the better option.. for others owning is the only way to go. Both have their good and bad points... however I lean toward owning because renting has tossed a number of sour grapes our way and if not for the solid biz plan we would have been sunk a long time ago. Now that we "own our own" I've found a great deal more expense and work yet all of it smoother, more in tune with our needs, and improving our business more than renting ever could have...

Hi Deb,

If I may ask, when you mention you're better off today because you "own" rather than "rent", what is it that you "own" that you're refering to as being optimum/needed for success?

The servers? A data center with contracted B/W? The "pipes" themsleves?

Not sure the level of ownership you're refering to as being better.

This question is for anyone, really. Please define the level/tier of ownership you are talking about, please.

Folks such as myself, who are still learning about hosting, may not know what you are -- or are not -- refering to.

Thanks one and all,

Louis

Originally posted by MotleyFool
Hi All,

...
I would like both users' and hosts' viewpoints on the reasons for this phenomnon

...


Here's an opinion from a Host:

It all boils down to four little words:

LOW COST OF ENTRY

Any Joe or Jane on the street can purchase a reseller account for $20 bucks and start a business. Then for the reasons that so many have already articulated, they decide to close down a few months later.

If that's all they have at stake, there is no incentive for them to stick with it when times get tough.

Take care,

Brian

The servers? A data center with contracted B/W? The "pipes" themsleves? I am referring to the entire Data Center and all within its walls (pipes, servers, racks, cabs, power, etc...). The more you can own the better in my opinion. HOWEVER - I do not think it's wise for a start-up on a low budget of course! If there are not enough clients yet to cover it... then it could put you in deep debt... Again it's just a matter of where the host is beginning at and where they plan to go from there. There are good and bad points to both...

Hi Deb,

Thank you for your reply. Now I know the level you were referring to.

I can understand the benefits of controling the variables. Having control over the quaility of what one offers customers would be most comforting to me.

I would imagine the amount of capital required to build, staff and operate one's own data center would be substantial. Don't know if a person is talking hundreds of thousands of dollars or even more.

What I really wonder about that way of doing it:

besides the amount of capital required;

and at what point/size to "own" rather than "rent",

is how it would divert or dilute one's focus from being a web host to managing a data center. Just the additional skill sets required -- networking expertise, facilities management, data/network security, keeping up with industry trends, and cost structures of various options...lots of expensive hats. Then there's the hosting part...and all that entails to do right.

I would imagine one would want to have a large base of hosting clients before taking that path -- else it's a lot of over head and risk while one is growing one's client base to break even (and profit, one would hope!).

I'm unclear how much of the advantage of owning one's own data center is related to cost reduction (and at what size one sees the cost reduction) .vs control of service/quaility issues.

Deb..or anyone else...please feel free to share or comment on these issues. I really want to learn and understand web hosting.


Thank you,

Louis

Hi Balaji,

I've noticed a pattern of "Stress Points" which all new companies - not just hosting - seem to go thru. A company can fail at any one, those least prepared falling earlier - which is why so many fall early as you've noticed.

1. Initial Startup.
Assuming reasonable planning, now you open the doors for business. Oh heck! - here come 201 things you never thought of. Requires ability to identify issues and react quickly.

2. Initial Growth.
Now you've maxed out on your startup capacity - people, machines etc. This is when the resilience of your business process will be tested for the first time. Requires ability to understand the underlying overall processes so you can properly streamline. Biggest failure rate here I think - you can't outsource or buy understanding.

3. Secondary Growth.
How do you expand beyond your initial capacities? Equipment & space are the easy decisions IMO - the key is people.

Do you hire employees? Whole new can of worms centered around HR admin, supervision, and the decreased service levels from people without the same knowledge and enthusiasm as the founders.

Do you outsource? What business functions? Accounting? Customer Support? Marketing? Tech? How good are you at identifying suitable suppliers? How will loss of control trade off against increased capacity? Do you buy the services, or sub-contract?

4. System Shocks.
Can happen at any time. Big fraud, hacker attacks. New technology launched which blows yours away. Economy dives, followed quickly by your market. You suffer a major personal setback. Partner, crucial supplier or customer bails out. Etc.

Requires foresight, contingency plans, and above all flexibility. Are you agile enough to redeploy resources and change plans quickly, or have you bet the farm and deployed fixed resources based on some key assumptions?

5. If you get this far...
... you've got farther than the large majority. You know how to grow while keeping the ship afloat, no mean achievement. It helps to know how far you want the business to grow, to be able to anticipate your industry's direction, and to be able to learn from experience.

Enjoy the view from on high :)

Mike,

You have nothing but wise words there! :)

For myself when I started with web hosting my plan was very clear - to have a nett profitability of 500$/mo [yes thats all, I aint ambitious] and then buy a farm and quit!

I initially started with a reseller plan from Alan of Splashhost and listed my self in directories and posted here and got a few customers [21 to be exact]

Then I realized that nothing is under my control in a reseller plan and decided to go for my server. I got a very good FreeBSD server from Focal and paid 130$ for 35GB of bandwidth [a decision that I never regret inspite of the seemingly incredible offers in the ad forums]

I am now grown to 37 clients and my plan is to reach 150 or so sites by December. I am funding the business from my salary and I take few clients per month and give them support to the best of my knowledge and ability. What I dont know I ask around in WHT and get quick & precise answers

I am just trying to understand the different pitfalls in a host's growth path and trying steer clear of them -thats why the post.

I am coming to realize that growth , unplanned, can be as detrimental to the business as no sales.

I cant thank WHT and all my friends here enough for all the knowledge gained and deals done [at a cost of 0.00 $!]

Before I become any more sentimental let me sign-off! :)

Cheers
Balaji

Because they are run by 15 year olds who have no clue what it takes to run a business or either a shady company trying something new to rip the next guy off. I hate hit and run hosts.

Originally posted by MotleyFool
For myself when I started with web hosting my plan was very clear - to have a nett profitability of 500$/mo [yes thats all, I aint ambitious] and then buy a farm and quit!
Well then you'd better heed my warning about "betting the farm"!:D

I take few clients per month and give them support to the best of my knowledge and ability. ... I am coming to realize that growth , unplanned, can be as detrimental to the business as no sales.A very good realization! So many businesses refuse to turn away customers if they don't have the capacity to handle them.

Strange really - they'll plan, control, manage, streamline etc etc every other aspect of the business to death, but let excess customer demand run amok without a thought!

As I said, you can't buy or outsource understanding. Good luck with your efforts - see you on the farm ;)

I think the web hosting businesses (if you can call them businesses) that come and go are the ones that really have no knowledge of the technology or of running a business, but just start a web hosting business because they think they can make a quick buck. Because everyone knows there's money to be had on the Internet. :)

Running a web hosting business is even a popular Multi-Level Marketing scam now.

ditto bitserve.

most just want to make a quick buck. They just don't realize that it takes alot of hard work, planning, supporting your clients whever they need help (it's not a 9-5 job..that's or sure)

Most of all, get ready to give up on that thing they call "sleep" ;)

Things will change though....just takes time.

Hi bitserve,

Web hosting is used by/in/as a MLM scam? Which one? Stuff like that never ceases to amaze me.

Thanks,

Louis

Originally posted by Mike Feury

A very good realization! So many businesses refuse to turn away customers if they don't have the capacity to handle them.

Strange really - they'll plan, control, manage, streamline etc etc every other aspect of the business to death, but let excess customer demand run amok without a thought!

As I said, you can't buy or outsource understanding. Good luck with your efforts - see you on the farm ;)

I agree. After hanging out here for a while I've seen the "new hot hosting company on the block" get popular, get tons of customers, and then flame out as they get over burdened, over stressed, and over extended server wise. Its ugly for the company and the users.

We make a point to have at least double the capacity we need at any one point in time. Not that we get that many orders to need to worry about too many customers. :-) (I think 5 in one day is our record high.)

Still though, as a small operation we need to plan ahead, and be ready for a surge in customers. Its not hard to do, it just requires some forethought.

Take care,

Brian

Originally posted by stlouislouis
Web hosting is used by/in/as a MLM scam? Which one? Stuff like that never ceases to amaze me.

http://www.webhostingtalk.com/showthread.php?s=&threadid=43190

What really pains me is to see a lot of sensible, stable and very knowledgible hosts have put in a lot of sweat to build a credible business and the hit-and-run hosts just ruin the entire credibility of the business

I have so far never seen a pre-sale email without some kind of suspicion and wariness [like walking into a dark unknown alley] and it takes them a month or so to say "hey this guy is okay , I can trust him"...

And Mike, thanks immensely for your wishes! :)

And WHT serves [atleast has so far served] a very useful purpose of being an impartial informer about hosts

A certifying authority about hosts would be very useful to customers - web hosting directories are not credible enough

Cheers
Balaji

PS: bteeter, I like your signature a lot! :)

Originally posted by phpjames
Because they are run by 15 year olds who have no clue what it takes to run a business or either a shady company trying something new to rip the next guy off. I hate hit and run hosts.

*cough* Shang? *cough*

Originally posted by MotleyFool
I have so far never seen a pre-sale email without some kind of suspicion and wariness [like walking into a dark unknown alley] and it takes them a month or so to say "hey this guy is okay , I can trust him"...

Ain't that the truth, they tend to get a little better as time goes on. Customer referrals and people remembering your name helps a great deal. We still get a few like that though, with some almost sounding aggressive about what they wish to avoid (from past experiences).

I think there's many reasons for hosting 'companies' to go belly up but the business plan - or lack thereof makes a big difference. Another thing to add, that I don't think has been mentioned yet is good old fashioned research. Solid hardware based in a good datacenter goes a long way to reducing future problems. We house at NAC and have found them to be exceptional. High uptime and fast responses to issues, coupled with good solid servers, and maintained software.

Will we ever build our own datacenter? Probably not. To offer a comparible 'upgrade path' we'd be looking at a mighty high investment to equal them for quality. Just to say we run a DC doesn't seem like a good enough payoff to our customer base.

Greg Moore

My comments below...

Take care,

Brian

Originally posted by MotleyFool
What really pains me is to see a lot of sensible, stable and very knowledgible hosts have put in a lot of sweat to build a credible business and the hit-and-run hosts just ruin the entire credibility of the business

In a way though, I look at this as a good thing. In fact, this very phenomenon (sp?) is one of the things that has caused us to be successful. Most of our customers have just come off a bad hosting experience.

You can always tell who those people are too because they either come right out and tell you, or you just know based on their "tone" in their communications.

The silver lining is, that if you can give them what they want feature-wise and give them good support when they need it they will stick with you. And, if your lucky, they will tell their friends and associates about you as well.


And WHT serves [atleast has so far served] a very useful purpose of being an impartial informer about hosts

A certifying authority about hosts would be very useful to customers - web hosting directories are not credible enough

Cheers
Balaji

PS: bteeter, I like your signature a lot! :)

I'd be skeptical about any "Certifying Authority". Anyone who gets paid to offer their "Certification" is suspect to me. Just like the whole "Truste" privacy certification was/is a joke, I would think any Host Certification would be as well. But, that's just me.

Glad you like the signature. I'll sell you a license to use it on your posts for just $50 per message. :-)

Just when I thought i found a good host, use them for half a year, then cracks start appearing and soon ... my website is down often ... time to change host again ... but I must be lucky this time .. I'm quite satisfied with my current host so far .. cheap and reliable :)

I think the reseller market plays a big part in this. For a very small fee, people who have never been in business before can suddenly start offering services around the world. However, a lot of people don't have a valid business plan and soon face problems, either with balancing fees with profitability or just plain support issues. To be honest, the reseller market does worry me a little as newbies to purchasing hosting can make big mistakes. Not to say that some resellers often offer the same level of service if not better than the bigger players but there's always one bad apple.

Scott
ProWebSpace.com

I don't think that webhosting is any more difficult then any other industry and there is no real phenomenon as to why so many web hosts come and go.

The only real difference is that you can enter the industry with no experience, no capital, and a few dollars. There seem to be a large number of hosts that fall into this category and I don't think we should focus so much on their coming and going but rather, the coming and going of realistic businesses that come into the industry with the same planning that they would enter any industry. If you focus on these web hosts you will probably find that it is just as competitive as any industry and in some cases even less competitive. If you want to see an industry with a large percentage of failures you just have to look towards the Restaurant industry (now that's a competitive market).

Also, I completely disagree that owning your own datacentre or being higher up on the Tier increases your chances of success. I just don't see the relationship between a datacentre and a web host. They are two completely different industries. I think a more realistic comparison would not be between owing a home or renting a home but rather, renting a home or starting a construction company.

True, there is always the chance that your provider will raise costs or go bankrupt on you. But, if you research the different providers I think you will find your chances of this happening much lower than the chances of your own business failing by entering into a completey new field with little or no experience in that industry. And, if this is a major worry of yours, you can further minimize your risks by having servers in multiple data centres.

Just my humble opinion,

David Delisle

In our case, it was the overhead expenses that killed us. We were kind of lured into the Alabanza thing (they made it sound so easy, plus we had an addiction to setting up accounts for some reason).

We had a long-term goal...unfortunately when you have to travel to and fro for web development clients (which was our core competency), you can't leave your customer service alone so we had every means possible (even SMS and stuff) to communicate with the hosting clients. We didn't realize the costs were very high until we double-checked accounting (something went really wrong there).

We were also using instabill at first, so when instabill shut down, some of our clients wouldn't pay on the new paysystems.com gateway. We gave them a month because we didn't want to be rude in shutting down their sites, and still they wouldn't. And some of them were angry when we had to shut them down (they won't pay anyway).

In short, we stopped hosting since last year (our business lasted for about a year), but we're still paying debts up to this day (even though we sold to another company).

We've learned our lesson the hard way. So now, I just refer clients to good hosting companies I discover via WHT and we went back to our core competency of simply developing sites and providing solutions/consultancy.

:)

Originally posted by Mike Feury

A very good realization! So many businesses refuse to turn away customers if they don't have the capacity to handle them.
...


As I said, you can't buy or outsource understanding. Good luck with your efforts - see you on the farm ;)


Too late before we realized it. And yeah, maybe part of it is our culture of being too...hospitable? We couldn't turn down clients because we thought it was rude. Laughable really. Now that we think about it.


But now, I'm happy that my current clients are happy with the hosts I refer them to. They ask me why I'm not hosting, and I tell them, "Been there, but the road was too rough." :D

I am no host, nor am I a business expert, although MBA is my intended major, but I have made many observations from my time in the web design business, and just sitting here watching hosts rise and fall.

You need to start a business with two kinds of connections. THe first are connections to the internet (duh). THe second, the true meaning of connections, are people and businesses. If you can supply a good business plan (that is, you can show that not only will you survive, but you will be a COMPETITOR), then I would expect that some of those connections will provide you with financial and/or promotional help.

i.e. You start Hosting Co. A, your friend ons Design Co. B, he likes your plan, and you make a deal, Hosting Co. A will provide exclusive web design services from B, while B offers to be a reseller of A.


The next thing you need is money. You can get that from your local bank (loans preferably, robbery is a bad way to start) You can incorporate (more work, a little less if you go S-corp) but you have the ability to sell stock.


You need to provide good customer service and reliable service. Reliability is inversely proportional to support calls. If you have a reliable system, you will have few requests, but you'll need good support because you will always have questions (pre-sales, how do I FTP, what do I need for, etc.)

User forums help, because a lot of questions such as (how do I make a directory in CPanel) are deffered there or to a knowledgebase.


Finally, you need to be competitive. Here's the problem in the industry. Before globalization of the majority of consumer economy, you started a business, go a sears-robuck catalogue, and were on your way to success. Everyone shopped at your store because they knew you, and they knew your services.

Today, you don't have as much benifit from gossip. Whereas people would shop with you because everyone knew you were the best, now you don't know your customers. You have to stick out.

To stick out you have to play on 'niche' markets. You might taylor your hosting company to people who need lots of bandwidth, but not a lot of space, or visa versa. You may taylor your services to families by providing pre-installed software for photos, forums, etc. and providing online instructions on setting them up.

Your last option is to rely on rumor. THat is how I became connected with Hosting Matters (hostmatters.com) THey didn't seem to have a real niche for me, but rumor from this forum and elsewhere lead me to them. You can't start on rumor anymore. Too many people are starting and rumor only helps if you're well established.

WOW! This is seriously one of the best threads/topics I have ever seen at WHT.. it may not dissuade the hotheaded opportunist from starting and failing, but it is refreshing to see so many good people say so many relevant things about web hosting AND business, and with candour in some cases.. this should almost be 'required reading' .. there is hope for the small to medium host yet.. isn't the open market a wonderful thing? Like nature itself LOL

Having seen middle and upper management in several industries at close quarters over the years, I can safely say that many who should be more sophisticated seem to forget some of these basics..

Only thing I can add is, as you grow, be light on your feet, adapt to change and expect it..

*warm and fuzzy*

Most of the hosts that go down so fast are those who think that having 100s of clients that pay a few dollars a month , for who know how much space and traffic , and do it on their own, are the ones that give up.

How in the world can you maintain your site, promote, market, administrate and support 100s of clients on a profit of a few 100 dollars?
I have been planning our site for almost a year now, getting all the facts straight. We do not plan to sell cheap plans, there are enough of them around; Ok , we may not get as many sign ups , but the ones we do we can support 100%.

These companies give web hosting a bad name Mayby it will change in time and people will think twice before setting their sites up for a dollar a month , just to see it disapear before their eyes, without notice!
Webhosting is a business and should be treated as one. It is not a side job you can do between your "work".
rinnando

I think that the past posts are accurate with stating that a hosting business (or any business for that matter) that does not plan will most likely not success. Knowing what you are heading toward can help when running a business, it helps to avoid surprises and keeps the STRESS low. :)

My hosting biz is small, therefore I will never need to own my own servers and will most likely always resell or rent a dedicated server (if I’m ready to work harder). I guess it would all depend on what your needs are and what type of control you want to have.

I think that both resellers and those that own their own servers can both be successful, and that neither have a better rate at succeeding. This is due to the fact that succeeding in the hosting business does not only depend on your servers, your other departments need to match up including Customer Support, Sales, Your Reputation, and overall good business ethics.

I think a general reason why hosting companies come and go, is the quick buck theory. To many people think that it is easy to run a hosting company, when in reality it is constant daily work, we can’t just fly off to Jamaica every week! (oh, but we can all wish!)

What I don’t understand, is how the CRAPPY and FRAUDULANT ones stick around… THEY need to HIT THE ROAD. (Just my rant from past experience). :angry:

Originally posted by littlest


What I don’t understand, is how the CRAPPY and FRAUDULANT ones stick around… THEY need to HIT THE ROAD. (Just my rant from past experience). :angry:


Yeah. I have no idea where they get the guts to get kicked off the industry and then come back again with a different name. And then have the gall to repeat the same cycle.

*shakes head* Some people never learn.

Others learn the hard way.


But you know, the best thing about losing out in the hosting industry and starting out again on a more familiar business model is that, I can warn clients about the fraudulent activities of other hosts...and I can tell when a particular host is lying about something. They can't run me around in circles anymore.

Originally posted by akashik

We house at NAC and have found them to be exceptional.
Greg Moore

Got a URL for NAC? Do they offer reseller plan?

Originally posted by chrisb


Got a URL for NAC? Do they offer reseller plan?


NAC is a network.. to get reseller deals you need to go to someone who is plugged in like Site5, Pwebtech.. etc etc or anyone using their's and similar services..

Originally posted by felix220
WOW! This is seriously one of the best threads/topics I have ever seen at WHT.. it may not dissuade the hotheaded opportunist from starting and failing, but it is refreshing to see so many good people say so many relevant things about web hosting AND business, and with candour in some cases.. this should almost be 'required reading' .. there is hope for the small to medium host yet.. isn't the open market a wonderful thing? Like nature itself LOL
*warm and fuzzy*

Whoa! I have some 350+ drivelling posts to this fool's bag and a few of them have been good even, but these are very strong words indeed!

I started this thread with the intention of knowing the pitfalls to avoid, as I grow as host, and I am mighty glad for the ideas and participation

And bteeter, now that you have changed your signature I can only offer you 39.95$ per 10 posts if you can accept payment through receivepal [your CC gets debited every time you charge me!]

Cheers
Balaji

Onething I didn't see posted along with all the other great examples
and comments here is to put yourself in your current or potential
clients shoes.

You need to think of yourself as a customer first ask yourself what
you would expect if you were looking for a hosting company.
Just having someone there to answer the phone, live chat,
support tickets or whatever the case may be does not mean the
support you are giving makes the customer feel good. Does not
mean they will stay with you.

Communication with your client is important, but it has to be knowledgable,
CURTIOUS support, going that extra mile and doing things other
hosts may not do such as fixing a script a clients has installed
and just cannot getting it working right for FREE instead of saying
"We can fix this for you but there will be a $50/per half hour with
a half hour minimumn"
Now this fix tokk you or your staff a total of say 5 minutes maybe
to fix but instead of being helpful because you wanted to make
an extra buck.

Sometimes you need to think of what you would want as a client and
then act upon your clients in the same manner.

If any of this doesn't make since excuss me as it is late and I am
a bit droggy, but could not resist the post.

Regards,
Ray