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  1. #51
    if you get a $1 client that you know is willing to pay (Even if you arent making much money), chances are they may upgrade later.

    as long as you arent losing money from these clients ...

  2. #52
    That is if they were to upgrade. Some people are just plain cheap and may not be willing to pay more than they are paying for now even at $1 a month.

    The thing is that if you could provide good and timely technical support, uptime and quality service at $1/mth and still make a good profit to ensure your survivability in the business for a forseeable future than go for it.
    http://www.batchimage.com - Offering Batch Image Processing and TIFF/PDF Software Solutions

  3. #53
    Originally posted by eddy2099
    That is if they were to upgrade. Some people are just plain cheap and may not be willing to pay more than they are paying for now even at $1 a month.

    The thing is that if you could provide good and timely technical support, uptime and quality service at $1/mth and still make a good profit to ensure your survivability in the business for a forseeable future than go for it.
    There are most certainly unknowns there. If the bulk of these people are new to having a web site what would be their chances of success that they would actually need an upgrade?

    Same situation for the other scenario though, what if the first 10 people on the server start actually using their large gig packages worth of transfer?

    I don't think the support could be provided for the dollar accounts any more than I think the huge bandwidth amounts could actually be provided. That's why I don't think either model is an ideal one.

    Could they be successful? Possibly, but then everyone on those servers run the risks that are associated with overselling.

  4. #54
    I would agree that at $1/mth hosting, you probably do not leave yourself with any buffer for any contingency and avenue for growth. If it survive, it probably be just hand to mouth, month-to-month worrying about paying for expenses.

    I ran a lot of numbers here myself a year ago when I thought I wanted to plunge into the industry since it does represent stable sustainable income if your clients do not ran away overnight but no matter how much I crunch the numbers, I just cannot get agreeable numbers. In the end, I never taken the plunge at least not in the mass market.



    In the end, I did turnkey solutions and charge my clients about $50/mth for 50mb diskspace + 1gb/mth traffic and I never heard them complain a single bit. In the end I am not really making money out of hosting because what they get is an under-utilized machine which all the resources and support their require. Then again, my clients are corporate clients.
    Last edited by eddy2099; 01-26-2004 at 11:35 PM.
    http://www.batchimage.com - Offering Batch Image Processing and TIFF/PDF Software Solutions

  5. #55
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    Re: Kid, I salute you...

    Originally posted by vantaticman7
    To everyone else I ask: What were you doing when you were 14? [/B]
    I was working on a farm gutting pheasants on the weekends for $40 dollars a day (4 hours a day).

    Now i'm tech support. Only difference between then and now is that the people I deal with on a daily bases are just plain brain dead rather then outright dead

  6. #56
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    At 14? I was designing websites. Made me a lot of money when I was in school, bought my first car and insured it. Not too many of my friends could say that . At $3000 a site (when designing was worth something) I put money away for education. Didn't take much of my time either. I still enjoyed a social life.
    Hosting.Express | Affordable Web and Email Hosting
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  7. #57
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    Originally posted by Watcher_TVI
    There are most certainly unknowns there. If the bulk of these people are new to having a web site what would be their chances of success that they would actually need an upgrade?

    Same situation for the other scenario though, what if the first 10 people on the server start actually using their large gig packages worth of transfer?

    I don't think the support could be provided for the dollar accounts any more than I think the huge bandwidth amounts could actually be provided. That's why I don't think either model is an ideal one.

    Could they be successful? Possibly, but then everyone on those servers run the risks that are associated with overselling.
    Overselling without knowing exactly how far you can go is silly. Knowing
    your industry and your customers on average is the key.

    Oh, and...
    When you buy in bulk, you can get a much better price on
    Printing is a good example. Printing 100 pages will cost you more than
    printing 1000 per page. Same thing goes with bandwidth. I would venture
    to bet that I pay a lot less per mbit/s of bandwidth at Equinix than you
    pay where ever you colocate.

    Dan
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  8. #58
    Originally posted by Hostkookster
    At 14? I was designing websites. Made me a lot of money when I was in school, bought my first car and insured it. Not too many of my friends could say that . At $3000 a site (when designing was worth something) I put money away for education. Didn't take much of my time either. I still enjoyed a social life.
    I salute you. =)

    If anyone has a CyberWings plan... *cough* then it wouldn't be so hard to offer $1/month plans. I remember I was so thrilled to be getting so much for so little. Well, that changed after a couple months. Hehe.

    Regards,
    Matt

  9. #59
    Join Date
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    Cheap hosting does offer several advantages, especially for someone entering the market:

    • Easier to acquire clients, in addition to capturing new customers entering the market, there is also an acquisition stream of customers switching from other hosts.
    • Less billing overhead, most cheap plans are annual, so there are less processing fees and time cost.
    • Doing annual billing, means customers are less likely to switch to competitors midway.
    • Less likely to lose customers to lower priced hosts. If the level of service is acceptable, customers will not be likely to switch hosts to save $5/year.
    • Losing a customer paying $24/year has less of an effect on the business than losing a customer paying $240.
    • If cheap pricing is coupled with good service, there will be a lot of referrals. People love to brag how they saved a bunch of money and they still get good service.
    • Hosting prices will drop further, it's been a steady trend and not likely to reverse itself. The cheap hosts that survive will be the ones also offering a good level of service. As the difference in quality shrinks, competitors will find it harder to justify the price difference. Eventually, cheap hosts will account for most of the market growth, you can already see the trends, hosts like iPowerWeb are offering huge plans very inexpensively and are growing at a fast rate. Competitive price pressures and customer awareness will at some point catch up with more expensive hosts and they will be forced to adjust accordingly.

    Lowering prices may not be easy for a host with an established customer base, but it's a one-way street for the majority of new hosts just entering the market.
    Last edited by brav0; 01-27-2004 at 03:55 AM.

  10. #60
    Originally posted by midphase-Dan
    Overselling without knowing exactly how far you can go is silly. Knowing
    your industry and your customers on average is the key.

    Oh, and...
    When you buy in bulk, you can get a much better price on
    Printing is a good example. Printing 100 pages will cost you more than
    printing 1000 per page. Same thing goes with bandwidth. I would venture
    to bet that I pay a lot less per mbit/s of bandwidth at Equinix than you
    pay where ever you colocate.

    Dan
    Seeing how math isn't exactly your strong point, I'm not sure I'd trust the rest of your calculations either...


    Brav0 makes a valid point with the yearly charges for $1 a month hosting. It's much more likely they will spend $12 a year than the guy getting his 50 gig allocation would spend $120. The processing fees would be much less for the $1 a month host.

    As I said earlier, either way you look at it for 20 cents a gig there is massive overselling going on....

  11. #61
    The thing is that you will need to support a lot more clients for the same price break. You need to get 10 clients and support 10 different people to make the same money as support 1 client which would definitely be a lot less headache.
    http://www.batchimage.com - Offering Batch Image Processing and TIFF/PDF Software Solutions

  12. #62
    I agree with that Eddy, I don't see either of these business models as good ones. Yet there are enough host hoppers out there that they manage to stick around...

  13. #63
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    Originally posted by Watcher_TVI
    Seeing how math isn't exactly your strong point, I'm not sure I'd trust the rest of your calculations either...

    I leave that to my technical staff... I'm no server admin.
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  14. #64
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    I'm starting up a business myself, and here's my expenses:
    Layouts: $225
    Billing Software - $100
    Billing Processor - $25/mo
    Domains - $30/yr
    Registration - $160
    Cable Internet for myself - $40/mo
    DemoDemo tutorials - $100

    So that's the startup, and once I have an income:
    Server: $220/mo/each
    Management: $100/mo/each
    Soholaunch - $300 minimum
    - DemoDemo for it - $100

    Now, I also will be paying for people to teach me advanced programming, server management, and design in the meanwhile, so that I can eventually become more self sufficient and expand my fields.

    Now, with that being the BARE BONES COSTS to start a business, plus hours of time, and not selling resellers (myself), I couldn't imagine ANYONE charging $1/mo -- I would definitely want more out of my company than that. With all that work put in, and those costs, I don't want to spend 3 years just to make back what I spent initially.

  15. #65
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    Chicago
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    Originally posted by DanX
    I'm starting up a business myself, and here's my expenses:
    Layouts: $225
    Billing Software - $100
    Billing Processor - $25/mo
    Domains - $30/yr
    Registration - $160
    Cable Internet for myself - $40/mo
    DemoDemo tutorials - $100

    So that's the startup, and once I have an income:
    Server: $220/mo/each
    Management: $100/mo/each
    Soholaunch - $300 minimum
    - DemoDemo for it - $100

    Now, I also will be paying for people to teach me advanced programming, server management, and design in the meanwhile, so that I can eventually become more self sufficient and expand my fields.

    Now, with that being the BARE BONES COSTS to start a business, plus hours of time, and not selling resellers (myself), I couldn't imagine ANYONE charging $1/mo -- I would definitely want more out of my company than that. With all that work put in, and those costs, I don't want to spend 3 years just to make back what I spent initially.
    And believe it or not, this is a pretty-low-cost way to do it
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  16. #66
    A few months back there was a offer to for a hosting company. The individual dealt in private.

    It was a kid selling hosting for $12 a year. Tons of space, tons of bandwidth.

    I told him I decline to buy. He wanted to know why, I said, that his prices were not realistic.

    He said they made $600 the previous month. I said on $12 accounts? He said yes.

    To make a long story short, I told him, no you lost $15

    He said how.

    I said, $600 / 12 = $50 month, his reseller account was $65 a month, thus a net loss of $15

    For the life of me I could not make him understand that the $$ he brought in he still had to provide service for the whole year.

    Kinda funny he wanted out of it.
    L. James Prevo - President/Owner
    Prevo Network, LLC - http://www.prevo.net
    Est. 1999 - Month to Month Billing!!

  17. #67
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    Chicago
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    Originally posted by ljprevo
    A few months back there was a offer to for a hosting company. The individual dealt in private.

    It was a kid selling hosting for $12 a year. Tons of space, tons of bandwidth.

    I told him I decline to buy. He wanted to know why, I said, that his prices were not realistic.

    He said we made $600 the previous month. I said on $12 accounts? He said yes.

    To make a long story short, I told him, no you lost $15

    He said how.

    I said, $600 / 12 = $50 month, his reseller account was $65 a month, thus a net loss of $15

    For the life of me I could not make him understand that the $$ he brought in he still had to provide service for the whole year.

    Kinda funny he wanted out of it.
    Accrued income is something that most people don’t quite understand when they dive head first into an industry like web hosting at the prime age of 14
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  18. #68
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    Originally posted by midphase-Dan
    And believe it or not, this is a pretty-low-cost way to do it
    I do believe it. What I can't believe is how people get away with putting up less than I am.

  19. #69
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    Originally posted by DanX
    I do believe it. What I can't believe is how people get away with putting up less than I am.
    You could, in theory, get going with a reseller account, a free paypal account
    and a 30 dollar template. This si not the right way to do it, but peopel get
    away with it all the time.

    I really do beleive that you have to spend money to make money.
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  20. #70
    Well, it is possible like the example ljprevo gave.. You collect annual payment and do not accrue them and just consider it as profit for the current month. So every month you need to grab as much customers and in order to pay for bills, you will have to grossly oversell.

    Some people do not factor in other cost factor into the business and as such their time, utility and internet connection fees are not part of the equation.

    One thing no one looked at is opportunity cost. At 14, I was in school studying when I have to and the other time, I was hanging out with my friends from school, neighborhood and also those I made through the BBS using my 300bps modem I knnow I did not start business young but those childhood years were precious.
    http://www.batchimage.com - Offering Batch Image Processing and TIFF/PDF Software Solutions

  21. #71
    Jay Suds,

    Because the gov't wants to be able to milk social security for all it's worth right now before they have to come up with some other scam to milk.

  22. #72
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    Originally posted by eddy2099
    Well, it is possible like the example ljprevo gave.. You collect annual payment and do not accrue them and just consider it as profit for the current month. So every month you need to grab as much customers and in order to pay for bills, you will have to grossly oversell.

    Some people do not factor in other cost factor into the business and as such their time, utility and internet connection fees are not part of the equation.

    One thing no one looked at is opportunity cost. At 14, I was in school studying when I have to and the other time, I was hanging out with my friends from school, neighborhood and also those I made through the BBS using my 300bps modem I knnow I did not start business young but those childhood years were precious.
    If you factor in the costs of hosting clients for a the term of the contract,
    the rest can be profit depending on how your terms are written.

    However, generally as a rule of thumb you meter income as acrued.

    And yes, you have to still push and push hard to grow. Otherwise, you
    just get bored
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  23. #73
    Join Date
    Mar 2001
    Posts
    1,446
    Originally posted by midphase-Dan
    The hosting market has changed, and it is not 1998 anymore where someone will pay $39/month for 150 MB of disk space. People expect a lot of bang for their buck.
    You mean people won't pay this anymore? Oh man, we're gonna lose a thousand or more clients real soon then.
    ok, so we give out a bit more disk space then that, but we have many people paying around that and more for hosting. They expect top service, and we provide it, so they pay willingly for that service. Price is important, but service and support still "take the cake" for any serious business related site.

    It is often amazing how much people undervalue their time and skill, and how little they are willing to make, to run their own business. But, to each his or her own.

    *You may now resume your regularly scheduled $1 hosting discussion.*

    - John C.

  24. #74
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    Originally posted by JWise
    I was thinking of opening up a hosting branch of my design site. Then I thought about it again.. and then again.. and then again.

    I might still go through with this, but in time I don't believe I will have the time to offer support the way I want to.. So most likely I can't open one up or Im going to have to hire staff.


    Either way. $1.00 a month won't be part of the plans
    believe me, hosting clients are a lot less hassle than design clients
    if you haven't considered chapter 7 bankruptcy, maybe you should.
    eliminate your debt, keep the property you want, most people qualify.
    contrary to popular belief - no attorney is necessary!

  25. #75
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    Originally posted by LaurenStephens
    believe me, hosting clients are a lot less hassle than design clients
    I second that view...hosting clients simply run until something breaks. A design client is constantly pestering you, could we do this or this...and they don't understand that the magic put into the site was not done in 5 minutes.

    I always liked (sarcasm) the design client that wasn't always happy with the design...change this, and this, and this...That is where I learned the valuable lesson of Contracts.
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