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  1. #1

    Is this dumb business strategy?

    I've had this thought lingering in my head, and my actually have the ability to finance it within a few months.

    The business trrategy is based on this tier hosting system.

    i.e., I, the end-user, purchases hstoing from ABC Hosting, ABCleases servers from XYZ Internet, XYZ leases space and bandwidth from PQR datacenter...

    In each level, someone provides something. At the hosting level, support and uptime are provided (although uptime can be affected by any of the above mentioned parties).

    Now I'd like to start a small (not-for-a-lot-of-profit) business designed on the hteory that support is not necessary.

    I would buy into reseller status from some company that charges me half of their regular (already reasonable rates). Instead of offering same-rates, I'd only mark up about 20-25% of each plan. So a plan that would normally be $8, would be $5 through me.

    I would design a three tier support system. Support is offered through a knowledge base (teir 1), this would be well detailed as to how to use the cpanel, ftp programs, offer download links, etc. Teir 2: Support forums, users help users, I post alerts (i.e., serve X is down because) Tier 3 is for system issues only. I.e., for some reason my password isn't working, I've been told my account is inaccessible due to HTTP 404 but the site is there, etc. (where questions would be those that could only be solved by admin)


    Question:

    WOuld I meet my goal of making a reasonalbe amount of 'extra' income without doing to much 'extra' work.?

    Would clients hate me, spam my email, and flame me on WHT?

    Would the model be feasible (assuming that there would be explicit warning that support for non-admin issues is not provided)?

  2. #2
    Join Date
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    Not to down your idea, but thats the same way all resellers and most hosts already operate...except hose of us that are all three tiers in one.
    Greg Landis | Founder Jaguarpc - Keeping websites happy since 1998
    Managed IT Solutions - Business hosting | Virtual Private Servers | Cloud VPS Hosting | Dedicated servers | Backup service
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  3. #3
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    delete

  4. #4
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    I see what you're saying and don't think it's a dumb idea at all. I'm sure many have tried to figure this out before. Automation is vital to any business. However, support is one thing that I don't think robots can do. Support is expensive and time-consuming, and it would be nice to hear others' ideas on how to at least minimize it, if not do away with it completely.

    I can see it now in the next wave of hosting. "Outstanding Hosting. Save money with no support." Sorta like "bagging your own groceries". It appears that everything is going self-service these days, at least here in the USA.

    I've often wondered how long it will be before some hosts start charging for support questions? That would sure cut down on all of the unnecessary questions and the questions that are already in the knowledgebase. People surely would look before asking if they had to pay.

    Let's see now... how about this...
    5 free support questions a month, one per email, additional support questions $5 per question. No Charge for support questions if the problem is not due to the fault of the client, or your question is not in the FAQ or knowledge base that is provided. We do not provide any support for HTML or scripts. Check your favorite search engine for answers to those questions that are not related to hosting.

    ... just a thought

  5. #5
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    5 free support questions a month, one per email, additional support questions $5 per question. No Charge for support questions if the problem is not due to the fault of the client, or your question is not in the FAQ or knowledge base that is provided. We do not provide any support for HTML or scripts. Check your favorite search engine for answers to those questions that are not related to hosting.
    I believe I hosted with this company back in '98. Or was it '97? I remember countless hours spent researching how to do things, and not finding answers, but not wanting to use up my carefully doled-out freebie questions, and worrying that maybe it was a server problem, but what if it wasn't and I would end up getting charged for the support????

    Of course that was back in the day when there wasn't a lot of good reliable information out there. Not like it is today, anyway... finding answers today is a snap compared to 5 years ago, in my experience. 'course, I've also polished up on those search skills, too.

    LOL!!! That was a good one, Chris.


    Bailey

  6. #6
    Join Date
    May 2001
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    Originally posted by chrisb
    I've often wondered how long it will be before some hosts start charging for support questions? That would sure cut down on all of the unnecessary questions and the questions that are already in the knowledgebase. People surely would look before asking if they had to pay.

    Let's see now... how about this...
    5 free support questions a month, one per email, additional support questions $5 per question. No Charge for support questions if the problem is not due to the fault of the client, or your question is not in the FAQ or knowledge base that is provided. We do not provide any support for HTML or scripts. Check your favorite search engine for answers to those questions that are not related to hosting.

    ... just a thought
    Hmmm... I just noticed... looks like BURST is already doing something similar. From their nocster reseller plans - "Abnormal Support Incidents $65 / Per Hour ---------- ** Due to client fault. Unreasonable support usage."

  7. #7
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    well whether you have FAQ's and support docs online or not, people will still e-mail questions in regardless of how 'in plain sight' the answers are - it's just how it works. What will happen is they'll get angry for not getting a response, no matter what they pay for the account itself. That angry minority will harp loud and clear and you'll get an unwarraranted reputation.

    .. at least that's the way I see it.

    Webhosting is a service industry, not a commodity industry. I tend to believe that any time you try to reduce support levels, regardless of intent, you're playing with fire.

    Greg Moore
    Former Webhost... now, just a guy.

  8. #8
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    *nods* which is exactly why I left that host. They are now out of business. Got bought out like a year later and the whole site and strategies, everything was dumped... the domain name became a pointer to someone else.

    Bailey

  9. #9
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    Originally posted by akashik
    Webhosting is a service industry, not a commodity industry. I tend to believe that any time you try to reduce support levels, regardless of intent, you're playing with fire.
    Web hosting is and isn't a service industry, it's part of IT and the rules are a little different.

    Computers were never intended for use by the general populace. They've been trying to make them more 'user-friendly' for years, but the vast majority of computer users are not able to use them without needing occasional help, and some people need a lot of help.

    IT (hardware, software and services) is in the position of providing goods and services to people who have not been properly trained to use them. Many of whom are unable (or unwilling) to follow troubleshooting instructions, or self-serve help documentation and call for help at the drop of a hat.

    Technical support (aka break/fix) is if there is something wrong with the product or service. Bugs in software, smoke rolling out the side of a PC, or a web site not available due to a server outage, require a call to tech support.

    Most small businesses use free software to browse the web and read their email (Netscape, IE, Outlook Express). There is no tech support except for self-serve included with these products. Many small businesses don't have anyone on staff to deal with their computers, so they deal with computer consultants who charge a hefty hourly rate. Being a service industry, computer consultants charge for their time.

    But not web hosts (unless they are also computer consultants, or other hourly rate service industry professionals). We have become the free Internet Help Desk for our customers. All they have to do is preface their call with "is there something wrong with your servers", and we are stuck. And if we don't help them for free, it's 'bad customer service'.

    You can't get away with calling Microsoft and telling them that Office is broken because you want them to talk you through using Macros, or your printer's out of paper. They will give you two options, hang up or pay up.

    Some of my favorites...

    "There's something wrong with your mail server, I can't get my mail." turned out to be "Ma'am, if you want to print out your email, you will need to put some more paper in the printer."

    "There's something wrong with your mailto script" turned into "Your web designer made a mistake and left a character out of the link to the script, therefore it won't run."

    Teaching the team of web professionals employed by a high powered web design firm who was charging one of our clients six figures for a rather basic web site, how to use FTP.

    "Your web server's down", turned into "Outlook Express has a bug in it, you just need to enter your stored username/password again."

    None of these was a legitimate tech support call. Legitimate tech support calls should be unlimited and free, because they are reporting a problem with a service you are providing them.

    But if they are looking for support for Microsoft products, training, troubleshooting their web designer's work, or help with their printer, they should contact the appropriate support personnel.
    http://forums.webhostdir.com/
    All your hosts are belong to us

  10. #10
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    Each "tier" of hosting requires each level to make some money from the customer buying the service.

    If too many people and companies are involved it inflates the price of offering the services.

    Also if too many people are involved it becomes a very large coordination effort trying to keep everyone on the same channel.

  11. #11
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    While I agree with you to a point, I'm still siding with 'service industry'. We still feel helping a customer outside the server is important. A large part of the webhosting experience does involve third party software.. from their ftp software to their e-mail client... whether we like it or not. They customer needs these tools to effectively work with their website. What's the point in offering POP and SMTP if the customer hasn't got a clue how to set their software up to make use of it. What's the point of webspace if they can't connect via ftp to upload their site.

    We've garnered more than a few customers by offering advice out of hand regardless of whether they host with us or not. I post on forums for the same reason. Maybe something I say will help someone out.

    While I appreciate the attitude of 'if it ain't on the box, don't ask', it's not something I personally subscribe to. While there's a point at which you cross the line (example "Why isn't my printer working?"), there is a certain amount of cross-over. Customer's do enjoy being informed of how to best use the tools they need to make their webhosting experience enjoyable. If, as a host, you can arm them with the information they require, they learn to be self sufficient, then it's a win-win situation.. happy customer.. low support requirements.

    Using that same philosophy our support calls are minimal, as we educate as we support. We don't often get the same problem twice from a customer, as they information they get back is comprehensive and honest, as well as being written to be easily understood.

    I spent three hours walking someone through tranferring their domain via NetSol last night (via e-mail on and off). I could have just pointed them at the phone/fax number, but felt it was better to hold their hand through it as they'd be with us for a long time afterwards if we were there when we were needed.

    In the same night someone had trouble signing up via our ordering system. I checked into it, and it tuned out his ISP was having issues and fudging the reverse IP check causing a failure. I happily tracerouted his IP and forwarded advice. He came back later and tried again and signed up without issue once his ISP had settled down. He's promised a testimonial we can use before he's even uploaded his website

    The internet is a deeply impersonal place. Even here, those we call friends are rarely more than conversations and sig lines. It's all zeros and ones. I feel a big part of being a webhost is to try to inject a sense of personality into their needs, and give a sense that there's a real person there looking out for their real needs. Some of these guys literally feed their family's from what they make from their websites after all.

    Whether by design or otherwise we gather a fair amount of new users. We've always looked out for them, and many are seriously long term customers, that we know won't be going anywhere soon. (define new as 'new to the internet') Where they find us is beyond me but customers are good wherever they come from. If you give them a serious reason to stick around, support them enough they learn to be self suffient, and impress them enough they tell their friends, then you're on easy street. They stick around, don't e-mail in support questions often, and are happy to bring in new clients.. without you needing to pay for advertising.

    At least that's my take on it anyway

    *edit*
    Geez I just saw this post.. I feel like Tim Greer
    */edit*

    Greg Moore
    Last edited by akashik; 06-15-2002 at 03:03 AM.
    Former Webhost... now, just a guy.

  12. #12
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    May 2001
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    Wisconsin, USA
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    This is not the usual type of question I post to, but the discussion here has been interesting and thought I'd add a few more thoughts!

    First, to reply somewhat to the original question, the idea of setting up a system with "minimal" support is a nice idea in theory, but I would have to see it work to believe it. It would be wonderful if indeed you could reduce costs and increase profit by doing so, but I think there are a couple of stark realities that are going to pop up.

    1) is exactly what most people have mentioned already, and that is that support is a necessary part of the hosting market....and at the various levels noted. In a way, some places are already doing the minimal support(just buy into a dedicated server...not "managed", but UNmanaged)......you get little to no support for anything on the server, just reboots or issues dealing with the hardware....YOU are responsible for the software side....and that brings you to another level of what you have to put in and DOES get you to the support necessity. I don't know if I'm mistaken here, but I don't think there has been a bug-free, problem-free control panel designed yet(nor one that handles it ALL). Thus, you're putting into this level yourself, or paying others indirectly. Down the line, resellers and other hosts have to cover the "public interface" and that is where the VOLUME support comes from. And, yes, as more and more inexperienced folks get sites, support necessarily will increase, as it will require addressing lesser important questions.

    2) which brings me to #2, is that in reality, costs on BW, servers, and space, have basically BEEN coming down over the years. For $30 5 years ago, you could get a basic site....now look at what $30 can get for you! Just 3 years ago, I had a hard time finding a "good" host for $10/month(most were $15-30)......and yet, look at all the $10 or less offers now! So, in reality, costs have increasingly come down. Domains cost less than a few years ago....fewer "free webspace" sites or "free email" sites on the net, so many people are migrating their "personal" sites to low-cost hosting, even that which isn't of the highest quality sometimes. So, the necessity of support is actually increasing and not decreasing.

    This, in my opinion, would almost seem to indicate that the exact opposite of what your "plan" is might be a far better route. Rather than attempting to offer "low level support" at "low costs", how about "high level support" at "fair costs".......maybe not $30/month for 5mb of space, but not the other extreme either. I think there is a distinct future in the smaller hosts who can provide personal support for those that they provide for. Having online FAQs, information, of course, would be GREAT for any host and a wise move for anyone providing services in the hosting arena.

    Just from my own angle, I do NOT like the big time hosts.....I don't utilize support "often", but when something does arise, I like to be able to get a reply from a human being, and one preferably that knows me by name and not just "an account number". In any business I deal too, I like to be able to offer more than comes with the territory....I am not afraid to build relationships(getting to know people) in the process......it makes it real for both parties then! I've dealt with hosting providers that do treat you like a number(and $$$ sign), and also dealt with smaller operators lately, and much prefer the smaller operators. I may pay a few $$ more for their service than I could get elsewhere, but I find it worth it. I'm not out to pay $30/month for the same thing, so don't take my comments too far, but I think a personal approach is going to go a lot further than a non-personal approach in this business. 5 years ago might have been a different story, but people like to deal with a human being when they need to, and I think we'll see more and more of that in the future of hosting.

    OK....I've worn out all the keys on my keyboard.....will stop for now....but those are a few more thoughts on the issue. If you can make a low cost/low support system work, great.....would be inspiring to see that done effectively!

    Take care...
    Michael

  13. #13
    Join Date
    Jun 2002
    Location
    Australia
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    Red face Hrm..

    I have to agree with some of you and disagree with others. I myself do not mind at all to help someone with an Outlook problem, something wrong with their HTML script, PERL script or whatever. But 1 thing I do know is that out of all my users, I am usually helping about 1/3 of them each and everyday with their PERL script problems. After hours on the phone, it always turns out something was wrong with their script.. although they start the call by saying: "Your server does not work with PERL".

    The only thing that 'tif's' me off with this, is that there is usually someone with a real problem on the line.. but they are on hold because someone needs help with HTML.

    If you are looking to get your website hosted, for the webmaster's sake, at least know how to write HTML.
    Last edited by Chicken; 06-16-2002 at 02:31 AM.

  14. #14
    We live in a world starving for service. Everyone is tired of waiting on hold after talking to a computer, everyone is tired of not being important enough to warrant personal service, yet for the provider of the service, the pressure is on to reduce costs - keep the price down.

    In actual fact, most clients are happy to pay a little bit more regularly (like with their monthly subscription) then to be told that to have their questions answered it will cost them $65/hr. At that cost the pressure is then back on the provider to solve the problem in the shortest amount of time.

    If people are treated like people and not just money making machines, they will (1) be more tolerant of the fact you are helping someone else at the moment and (2) be prepared and happy to pay that little bit more each month in order to have the help there when they need it.

    It's when businesses charge the world and still fail to deliver or deliver grudingly that clients get upset and then demand more.

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