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  1. #1
    Join Date
    Nov 2002
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    4,667

    How to raise $40,000 and start a webhost in 3 days


  2. #2
    Join Date
    Feb 2003
    Location
    Connecticut
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    5,460
    This belongs in Related Offers and Requests.

  3. #3
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    May 2002
    Location
    Sunny California
    Posts
    1,679
    Actually, it's already sold out, so it's not an offer.

    Pretty interesting. They raised $40,000 (well, $39,800) by offering $199 "lifetime" hosting to 200 people. I suppose they'll use that to start a hosting business and the ongoing costs will be absorbed as marketing/startup expenses. That's one way to do it, I suppose...
    Erica Douglass, Founder, Simpli Hosting, Inc.
    »»» I founded Simpli Hosting, and sold it in 2007 to Silicon Valley Web Hosting after over 6 years in the business.
    Now I'm blogging at erica.biz!

  4. #4
    Join Date
    Nov 2002
    Posts
    4,667
    It is not an offer or request.
    The offer is over.

    It is just an example of how someone quickly financed a new webhost business.

    He cleverly raised $40,000 in 3 days ($200 x 200 members) in an initial offer for lifetime hosting.
    When he goes live it will be regular 1 year pricing.

    I waited until the offer was over before posting. (sorry )

    FYI It was $200=10 domains & 10 gig/month - lifetime.
    Last edited by Techno; 05-27-2004 at 08:02 PM.

  5. #5
    Join Date
    Aug 2000
    Location
    NYC
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    6,623
    Originally posted by Simpli-Erica
    That's one way to do it, I suppose...
    One way that's not as easy for most people as it was in this case -- since this offer was made to members of a well-established online community, who apparently have a lot of trust and confidence in the person making the offer.

    Flat rate "hosting for life" offers by startup hosts have been around before, and if they come out of nowhere from someone unknown to you, you'd have to be a little skeptical.
    Specializing in SEO and PPC management.

  6. #6
    Join Date
    Feb 2004
    Posts
    363
    Originally posted by JayC
    One way that's not as easy for most people as it was in this case -- since this offer was made to members of a well-established online community, who apparently have a lot of trust and confidence in the person making the offer.

    Flat rate "hosting for life" offers by startup hosts have been around before, and if they come out of nowhere from someone unknown to you, you'd have to be a little skeptical.
    Nicely put, I agree entirely, especially when he's the Administrator.
    Cory Pippen
    San Diego Direct Web, LLC
    1-866-611-3604

  7. #7
    damn that's pretty sweet startup
    all you need is one server and put those 200 ppl on it
    and heck you won't lose that much money overtime since you are acquiring more and more ppl
    smart idea

  8. #8
    Join Date
    Aug 2002
    Location
    Seattle
    Posts
    5,525
    Most of us in this thread right now are pretty well known around here, right? Lets go make us $40k

  9. #9
    kinda like pre-selling condominium units even before construction starts

  10. #10
    Definately a hosting company worth keeping an eye on. I know I'm really interested to see how they go about promoting their site with 40K startup capital. It's certainly not big dollars, and those sort of dollars can go in the blink of an eye, but it's more than most start with and it will be interesting to see how they go.

  11. #11
    Join Date
    Feb 2002
    Location
    Australia
    Posts
    24,027
    Originally posted by JayC
    One way that's not as easy for most people as it was in this case -- since this offer was made to members of a well-established online community, who apparently have a lot of trust and confidence in the person making the offer.
    Yep, but they're not really a large community, as it only has around 11,000 posts. But the admin obviously has good credibility there and successfully leveraged off that for his webhost startup. More power to him too.
    WLVPN.com NetProtect owned White Label VPN provider
    Increase your hosting profits by adding VPN to your product line up

  12. #12
    Join Date
    Sep 2003
    Location
    New Delhi, India
    Posts
    78
    well it was an interesting way to earn starting revenues for better buisness and they just earned $40k was really good.

    If you go for a server to offer people lifetime hosting coz a good server would cost around $1800 or something and you can offer to your customers.

    Well good upto 8-10 years or so i think after that you will earn a lot of money to handle a free hosting server for sure.Even you can handle server like them a lot.

  13. #13
    Join Date
    Jan 2003
    Location
    Houston, TX - Originally from UK
    Posts
    707
    Heh...well the cat's well and truly out of the bag now, so...

    I saw this when Dean first posted it. Thought it was a great idea. Decided to replicate it.

    Not advertising (because the offer isn't live...yet! ), just letting folks know that when our offer does go live, this is where we drew our inspiration from.

    In our case, it's our relaunch special, in cased anyone's curious.
    Kinkamono Internet Services - The Internet. Done Right.
    Dive In...

  14. #14
    Join Date
    Aug 2000
    Location
    NYC
    Posts
    6,623
    Originally posted by Aussie Bob
    Yep, but they're not really a large community, as it only has around 11,000 posts.
    But the community targeted for this isn't only the people who've posted in the forums... it also includes anyone using the Textpattern CMS -- or at least those Texpattern users who even read the forums, whether posting or not, if the offer hasn't been made elsewhere.
    Specializing in SEO and PPC management.

  15. #15
    Join Date
    May 2004
    Posts
    88
    Neat way of getting funded and also lots of word of mouth advertisements

  16. #16
    Join Date
    Jul 2003
    Location
    Satyr, Chrisalya, Canada
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    1,901
    Originally posted by Zopester
    Heh...well the cat's well and truly out of the bag now, so...

    I saw this when Dean first posted it. Thought it was a great idea. Decided to replicate it.

    Not advertising (because the offer isn't live...yet! ), just letting folks know that when our offer does go live, this is where we drew our inspiration from.

    In our case, it's our relaunch special, in cased anyone's curious.
    I was going to do this too!
    --

  17. #17
    Greetings:

    Fine print: "After 12 months you get the same hosting package free of charge for as long as TextDrive exists."

    What I cannot understand is any envy in what is most like another rip off.

    There are more important things than money or how quickly it is generated.

    Thank you.
    ---
    Peter M. Abraham
    LinkedIn Profile

  18. #18
    Greetings:

    Fine print: "After 12 months you get the same hosting package free of charge for as long as TextDrive exists."

    What I cannot understand is any envy in what is most like another rip off.

    There are more important things than money or how quickly it is generated.

    Thank you.
    In reading these forums I generally agree with what you have to say but I have to disagree here. I guess what troubles you is the "...as long as textdrive exists" disclaimer.

    He HAS to have a disclaimer in place to protect himself. Also, he has obviously earned credibility over time as the developer of the textpattern software and admin of the forum where the offer was made.

    In addition, $199 broken down is only $16.58/mo over a year for a pretty decent package. With a fresh injection of cash, I wouldn't think it likely that the company will go down within a year. And of course the offer is, ostensibly, for life. Yes, he could go wacko and disappear with the cash, but that could happen with anyone you do business with at any time.

    I think it was a brilliantly executed promotion, and good for him. Yes there are more important things than money, but we're all in business here... for money. Recognizing his creativity doesn't necessarily equate to envy.

    Finally, it probably hasn't been lost on anyone that he now has a huge responsibility to service 200 new clients that signed up within 3 days, and who will not generate any new monthly income. This is not exactly a risk free venture for him, despite the 40 grand. But it's close

  19. #19
    Join Date
    Jun 2003
    Location
    Washington State, USA
    Posts
    690
    $200 isn't a bad price to pay for a full year of hosting (assuming the hosting is of any quality --including support--) so even if he goes down after 12 months the initial customers basically should have gotten their moneys worth. I wish I would have t hought about this when I started out, would have been a lot less headaches.

    As long as he delivers I think it's a great idea.
    Ryan Porter, Owner
    Extreme Internet Solutions
    Quality Hosting Solutions -- Affordable Prices
    Providing Fabulous Hosting and Unreal Web Design! Excellence is our focus.

  20. #20
    Join Date
    Apr 2004
    Location
    Phoenix, Arizona
    Posts
    151
    Someone is going to combine this with a revenue sharing offer.
    Something like...
    "For $1000 you get hosting for life (with these specs...) and a .1% of the revenue stream (off the top) paid quarterly. First 100 people only."

    $100,000 cash infusion that cost 10% of revenue.

    Starting with 100 customers, doubling every year, with an average package price of $10 / month, the investors recoup their $1000 in year 5 with about 1600 customers and make money after that - plus still get their hosting. (God bless the spreadsheet. lol ) Of course the pricing would have to create margins much greater than 10%

    How many chances are there for someone to be a "mini-Venture Capitalist" for $1000? I've never heard of one before.

    As always, the person doing it would have to have serious credibility and track record-proven ability to run the business.

    I bet a write-up in mainstream business magazines would be simple because this is so unusual. That would raise huge awareness of the brand.

    Just a thought.

    Daniel
    http://www.IwantFUI.com
    If you could host a new kind of content from your old-fashioned web servers
    and make new money from your customers and differentiate your business all at the same time... could you afford not to try? See the new site

  21. #21
    Greetings:

    How many "hosting for life" offers from companies are 1) still present in terms of the product line, and 2) the company itself is still present?

    If my memory is correct, this tactic has been tried in the past how many times?

    How many times were customers not scammed out of their money?

    To be very clear ==> scam equal theft.

    Thank you.
    ---
    Peter M. Abraham
    LinkedIn Profile

  22. #22
    dynamicnet:

    thank you for defining "scam"

    Look, I'm not inside the guys head. I can't tell you it's NOT a scam. But you can't tell me it IS.

    Is it a new idea? No. If you want the answers as to who's done it before, who managed to stay in business, who was a crook and who wasn't, then do the research yourself. But don't blindly ask the questions, even rhetorically, and not be able to follow up with the answers.

    Why condemn him if you're not privy to the inside info here? If he's honest, then both he and his clients are happy, a deal well done. If he's a scammer, then he's a thief, because "scam equal theft", as I've recently learned. But without knowing him or even waiting to see how it turns out, you've branded him a criminal.

    My final word is this: it was a well conceived and well executed venture capital raising promotion, simple as that. Whether he turns out to be a thief or not is irrelevant to the concept itself.

  23. #23
    Wow, that is just amazing!

  24. #24
    Join Date
    Aug 2000
    Location
    NYC
    Posts
    6,623
    Originally posted by dynamicnet
    How many "hosting for life" offers from companies are 1) still present in terms of the product line, and 2) the company itself is still present?
    Who knows? Could be thousands of them are around and doing well.

    But there are important differences between this offer and most of the other similar ones I've seen. One of them, again, is the connection between the person behind the hosting company and the group of people the offer's being made to. Another is that the offer is limited to 200 customers.

    The trap that "hosting for life" brings is biggest if it's the company's entire business plan. The problem is similar to that with yearly plan sales -- cash flow. If your customers only pay you once up front and are a burden on your systems and staff for years later, you have to continually bring in new customers to pay the bills and to facilitate growth (or you have to have put a lot of money aside). So, the typical result has been a company more focused on sales and marketing than on service -- paying more attention, that is, to finding new customers than to supporting the existing ones.

    In this case the plan apparently is to operate just like most other hosting companies once the startup offer is over. There'll be a good amount of cash raised up front from the "lifetime" sales, but steady income from "normal" customers after that.

    Seems like a sound idea and reasonably likely to work. Calling it a "scam" at this point based on nothing more than what little you know of the business plan is very much unfair
    Specializing in SEO and PPC management.

  25. #25
    Join Date
    Jun 2003
    Location
    United States of America
    Posts
    1,847

    What you get for US $199:

    12 months of incredibly good hosting (see below) with the top TextDrive package (1gig storage, 10gigs bandwidth, 10 domains)
    After 12 months you get the same hosting package free of charge for as long as TextDrive exists
    50% discount on future Textpattern corporate licenses
    A Textpattern t-shirt!
    For those who trade: 10 pre-stock-split blogshares in Textpattern.com

    After 12 months you get the same hosting package free of charge for as long as TextDrive exists

    just an FYI, but yea this will be interesting to see how thing turn out on both sides of the fence
    Computer Steroids - Full service website development solutions since 2001.
    (612)234-2768 - Locally owned and operated in the Minneapolis, Minnesota area.

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