In the course of doing reading and research on here, I have noticed that more than a few established companies have been said to be slipping, going downhill, not nearly as good as they once were, etc....

Manyt times there has been mention of growth and popularity, so I'm wondering...is it there some sort of threshold for the size of a hosting company? That really doesn't seem likely, so is it because of growing pains that they suffer some period of decline, or is it poor management coupled with rapid growth that has caused these companies to slip?

Seems ominous that over and over a company becomes successful, grows large, then the quality suffers, people leave in droves, and they start to tank...makes you wonder if you really want to get very big.

Reminds me of stars...how they supernova and then die out.

I think the same service problems exist in all businesses, large and small.

That is true, but I wouldn't say they "tank" or fail as they get larger, given their inability to keep support levels matching their growth. You do see it happen here on WHT. A host gets popular, and gets too much growth too fast, and this invariably causes complaints on WHT and their customer base thins out no doubt.

But if growth is managed, and the hosting owner/s have a half decent head on their shoulders, there's no reason why a host need hit this wall. It's just showing they were not ready for that level of success, in their personal development.

It does take maturity and a cool head to run a growing hosting business, but most of these hosts are very young, so lack the required level of personal development and this really shows when they're under pressure.

A host gets popular, and gets too much growth too fast, and this invariably causes complaints on WHT and their customer base thins out no doubt.

That's true IF the host's primary market is WHT. "Complaints on WHT" does not always = a thinning customer base.

That's true IF the host's primary market is WHT. "Complaints on WHT" does not always = a thinning customer base.
Although when you see complaints spiking on WHT, you know something's not right with the host. WHT is a pretty good barometer for how a host is running. You would have experienced that first hand when Site5 went through a rough time here about 12mths back, but your employment status with them would prevent you talking freely about that no doubt.

Another thing to consider is that when a new host starts out, they may have a lot of free time on their hands to give extra support. When they become bigger, they have to start managing their time more carefully. What happens is not that their support suddenly becomes bad, but rather that it goes from "too good" to normal. Existing customers may see this as a decline in service, when it's really just the natural course of a business.

Although when you see complaints spiking on WHT, you know something's not right with the host.

Generally speaking, I'd agree with that statement. Although, it should be noted that it is very common for a customer who finds a host through WHT to only return if they feel the need to complain. Unfortunately, I think you tend to see that happen more often than customers returning to sing songs of praise for their new host. Many people find hosts through WHT and don't even sign up for an account unless they're unhappy with their choice. That's not usually the case for forum members that are an active part of this community, and obviously if the host does thoroughly please the customer (or exceeds their expectations, etc.), many people do come back to post positive reviews.

WHT is a pretty good barometer for how a host is running.

Yes and no. There are plenty of hosts on WHT that regularly receive bad reviews, but from a financial standpoint, they're doing "well" and growing steadily. I myself am a firm believer in user reviews, I love to read user reviews before purchasing a product, booking a vacation, etc., however, I also know for a fact that a host can seemingly have more negative than positive reviews on WHT and still be "running" strong. Overall WHT, or more specifically, user reviews, definitely are useful and can help a prospective customer capture a glimpse of what a given company's service might be like.

You would have experienced that first hand when Site5 went through a rough time here about 12mths back, but your employment status with them would prevent you talking freely about that no doubt.

I can't disclose too many details, but that situation is a perfect example of WHT complaints not equaling a thinning customer base. Maybe Site5 had some growing pains, but people also need to realize that Site5's management team (at the time) shifted to targeting an entirely different market segment, and as a result, the level of support offered evolved along with Site5's evolving product offerings and business plan. In the past, Site5 had used WHT as a target market, so when the company shifted to targeting a different segment, many customers obtained through WHT weren't pleased, and readily voiced their opinions on the changes in service, etc. Was Site5's decision a good one? Were the results positive or negative? I'm not here to debate any of that.

That being said, even though complaints on WHT haven't exactly (or noticeably) hindered our growth over the past year+, no one wants to see their customers unhappy with the level of service they are receiving. Site5 has definitely made attempts to address the needs of those customers that are not satisfied with the level of service they are receiving, and has shifted back to focusing on customer service as one of the major cruxes of our business.

If WHT is your primary market and you're getting negative reviews... then yeah, that sounds like it could seriously hurt your business. But even if WHT isn't one of your primary markets, having a solid reputation and having mostly positive reviews from happy customers obviously wont hurt :).

but people also need to realize that Site5's management team (at the time) shifted to targeting an entirely different market segment, and as a result, the level of support offered evolved along with Site5's evolving product offerings and business plan.

im a site 5 customer and have been for a few years, im happy with my service almost all the time, just curious though what this is referring to? "shifted to targeting an entirely different market segemnt?"

I think the same service problems exist in all businesses, large and small.

on the original topic, agreed! service levels can vary in a big and small, successful and not businesses. it just happens and often, unless the company is failing, it gets corrected.

Here is a true story, to help illustrate.

I remember when httpme.com (a new company at the time) was growing very fast, and the owner (Aussie Bob) actually shut down new signups.

To me, this represented the ultimate in smart business management. It gave him time to sort out any support problems very quickly, so that existing customers were kept very happy. Only when he was ready did the doors open again for new signups, and the business was able to jump successfuly to "the next level" without any unhappy customers.

Aussie Bob was (and still is) a smart business man. He was willing to sacrifice a few extra dollars and customers so that he could keep his current customers happy by not overloading the support staff.

This is something many business owners are not willing to do, because they are too greedy and they see the new customers as extra money and don't want to lose it. As a result, they grow very quickly and too fast... so that the support system is overwhelmed and then customers start to complain because support level becomes slower, then they leave, and the company eventually dies. We have all seen it many times.

A smart business man (Aussie Bob has proven himself twice now) knows that money is not everything. Happy customers are critical, and if you place your financial profit over the happiness of your customer base, then you will eventually be out of business.

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That is true, but I wouldn't say they "tank" or fail as they get larger, given their inability to keep support levels matching their growth.
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This is true, I was with a supplier who charged for MySQL and Secure folders. It got to the point where I was paying more then a Dedicated Server would cost so I got a dedicated server and put all the spam filters on I could instead of waiting for things to be done now I just do it and the customers are happy with the service.

Here is a true story, to help illustrate.

I remember when httpme.com (a new company at the time) was growing very fast, and the owner (Aussie Bob) actually shut down new signups.

To me, this represented the ultimate in smart business management.


I wouldn't say that is a smart businessman. A smart businessman would have forseen the fast pace growth and would have been ahead of the curve in getting new employees onboard. You can't just shutdown your business like that, it leaves bad impressions that your not on top of your game in managing your company growth.

Read "Small Giants", it details how growth can ruin a business and is not even necessarily good as it causes expansion that costs more money than you make.

http://www.amazon.com/Small-Giants-Companies-Choose-Instead/dp/B000VPMKXO/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1206640808&sr=8-1

so I'm wondering...is it there some sort of threshold for the size of a hosting company?

Over the years we've seen a lot of very successful companies that seem to reach a size they cannot grow beyond. Sometimes the reason is obvious (e.g. no delegation by the owner, lack of capital, etc) other times it is not so clear as to why.

So while I do not think there is any ceiling on how large a hosting company could theoretically grow, I do think there are various hurdles along the way that have to be mastered and gotten over for any company to continue to grow and any of these could prove to be a barrier that caps the size of a company.

I have always been a firm believer in organic growth. Our growth is funded from the capital earned on existing businesses not borrowed money from venture capital. Yes, it may not be as glamorous to have several million dollars injected in to the coffers by angel investors and be able to buy expensive hardware and hire people that you cannot afford. But I would rather increase our assets over time with the money we have earned and know that we have true profit.

Back in late 90’s the whole bubble was formed around the concept of “get big fast”. A lot of tech companies went IPO with practically $0 in revenue. Investors gobbled that up in a feeding frenzy. Greed will always cause failure in any business model, you cannot grow faster than what your current revenue stream can support. I’m not saying borrowing money is bad, in some cases there are legitimate needs for short term capital injections. Everything has its cost, including the money.

GrindKore, well said. Couldn't agree more.

In the course of doing reading and research on here, I have noticed that more than a few established companies have been said to be slipping, going downhill, not nearly as good as they once were, etc....

Manyt times there has been mention of growth and popularity, so I'm wondering...is it there some sort of threshold for the size of a hosting company? That really doesn't seem likely, so is it because of growing pains that they suffer some period of decline, or is it poor management coupled with rapid growth that has caused these companies to slip?

Seems ominous that over and over a company becomes successful, grows large, then the quality suffers, people leave in droves, and they start to tank...makes you wonder if you really want to get very big.

Reminds me of stars...how they supernova and then die out.

What you observe is related more to the lack of managerial knowledge and experience than a scientific fact (as with stars). Though, of course, I can see why you would draw this conclusion. However, the problem arises because many hosts are launched by technical gurus - these people are great with creating and managing a world-class technical platform. However, when it comes to managing a fast-growing company (which has very different skills requirements than a small business), most technical people lack the skills required.