I've been thinking that a great way to start my hosting company in the near future would be to give away a small amount of hosting packages. I believe this would be ideal for two reasons. First, you can fully test out if everything is set up correctly, including support, billing (would send out bills for $0, or perhaps the regular price minus a coupon), and the accounts in general. Second, it would be extremely cheap advertising if you are into word of mouth advertising. So, my idea is to offer the free one year plan through WHT and in doing so I would request the client to share any difficulties or issues they experience with my service. I'd love to hear from someone here who has tried something similar.

Regards,
sofoho

It's not a bad idea, perhaps also insist that they also place a banner/text link on their website saying "hosted by..." that way it helps with your google ranking, and you might get a few customers aswell.

The one major downside is your bound to attract quite a few unwanted customers (spammers, phishers etc)

It might be a good idea, but such offers often attracts somewhat less valuable clients, e.g. fraudsters and spammers. Word of mouth advertising is very effective and a great way to get started for companies without a huge bankroll.

I believe this may be partly how 1&1 became quite huge so quickly. It was around 4 years ago when they ran the full page magazine advertisements for 3 years of free web hosting (I believe it was in Business 2.0 and/or Wired). I know it worked for them in at least 1 case, a friend of mine had the free account for 3 years and has been a paying customer for slightly less than 1 year after the free time period was over.

So, my idea is to offer the free one year plan through WHT and in doing so I would request the client to share any difficulties or issues they experience with my service. I'd love to hear from someone here who has tried something similar.

This might be against the WHT rules, as you are offering a whole year of free service... while different than "free hosting" it is still a long time.

Anyway, if you offer one year of unconditional free hosting expect to be overwhelmed in every area. I would imagine you will have rapid growth, which will means you're going to need staff, and since you're not selling anything... this could be a problem. Let's not even get into the amount of servers required if your one year of free hosting promotion takes off with a bang!

Another thing to consider is that most people who sign up for a free year of hosting, probably have no intention of ever paying once that year is up. This will also create another problem... the seedy crowd will flock to your service. Think spammers, phishers, child porn, and everything else you don't want on your servers.

If you are going to go ahead with this, the first step would be to implement an automatic phone verification system. For example, if someone signs up, the phone system will dial them and confirm that it is a valid number. If you want to go even further, depending on your merchant and how you have everything is setup, you could force people to enter in a valid credit card, do a pre-authorization (?) without actually charging their card... you know, just to make sure these people actually have a valid credit card.

Good luck though, you'll need it along with a few Xanax and Advil. :D

This might be against the WHT rules, as you are offering a whole year of free service... while different than "free hosting" it is still a long time.

Anyway, if you offer one year of unconditional free hosting expect to be overwhelmed in every area. I would imagine you will have rapid growth, which will means you're going to need staff, and since you're not selling anything... this could be a problem. Let's not even get into the amount of servers required if your one year of free hosting promotion takes off with a bang!

Another thing to consider is that most people who sign up for a free year of hosting, probably have no intention of ever paying once that year is up. This will also create another problem... the seedy crowd will flock to your service. Think spammers, phishers, child porn, and everything else you don't want on your servers.

If you are going to go ahead with this, the first step would be to implement an automatic phone verification system. For example, if someone signs up, the phone system will dial them and confirm that it is a valid number. If you want to go even further, depending on your merchant and how you have everything is setup, you could force people to enter in a valid credit card, do a pre-authorization (?) without actually charging their card... you know, just to make sure these people actually have a valid credit card.

Good luck though, you'll need it along with a few Xanax and Advil. :D

I agree, you would have headaches if you were to give away an unfixed amount of packages, however, as in my original post, my idea was just to have a small number of free accounts, (maybe 4-5) probably given out via fixed use coupon codes. Also, I'm not planning to oversell so I believe I don't have to worry about server overload. Is it against WHT rules to do so? I was thinking of this more as an extended free trial that benefits both the company and the users.

I agree, you would have headaches if you were to give away an unfixed amount of packages, however, as in my original post, my idea was just to have a small number of free accounts, (maybe 4-5) probably given out via fixed use coupon codes. Also, I'm not planning to oversell so I believe I don't have to worry about server overload. Is it against WHT rules to do so? I was thinking of this more as an extended free trial that benefits both the company and the users.
WHT might allow it if you specified in your post something like "free to the first xx signups". But I would suggest opening a support request with wht first and check with them before posting you advert.

Also, as mentioned by someone else earlier, you want to scutinize every free order very carefully before activating the account to avoid spammers etc

I believe it is good idea. I always tend to believe to the company which give away some products or services for free testing. Your potential customers will understand that you would not be able to offer this if you would not have quality product or service.

Good luck with this strategy!

Its a good idea, but choose your customers carefully.

Dont just offer free hosting to every tom, dick and harry.
Unless you want your mail server black listed :P

Advertise it as "Hosting Beta Testers Wanted"

Free Web hosting Accounts are easily destroyed by spammers, and network cheaters. Some php or cgi scripts will also increase your CPU load seriously.

You should also specify domain options, are you buying their domain? Or do they have to have a domain already?

I do not think it's a good idea, unless you've got money to pay for the server and support during this year without a profit. You would better offer free services to non-profit organizations, schools, etc.

Offer it to the fist 1000 sign ups and definitely do the same verification you would on a normal paying customer to avoid any kind of fraud. If you want to be really tricky, have a counter on your order form that says how many people have signed up and leave it hovering around 980-990 so people feel like they need to get in there quickly.

Verify, Verify, Verify, offering free accounts just asking for fraud and spammers. Most hosts get quite a few fraud/spam signups for paid accounts so the amount you will recieve is going to be very high who will try and take advantage of your free offer and do things that will hurt your company costing you money in the long run. Make sure to have some kind of limits set on those accounts. I would recommend getting MaxMind or some other fraud system and do a authorize on the card so you can run a check through the fraud system to at least get some kind of idea if the customer is legit. You don't have to charge them, just authorize to make sure it works so it will provide you with some kind of gurantee, make sure to stat this on your site. This will ensure less headaches down the road ;)

Another option is to go to freewht.com, it deals specifically with free hosting, and that might work out better with you until you go for paid hosting.