I recently have been exposed to different opinions on this industry, those opinions comming from some of the most successful. Now I'm questioning whether or not my business structure has a long term successful future.
I was recently told that I shouldn't expect to profit for 2-5 years after initially opening the business. That made me wonder if I had any idea what I was getting into.
Although I know in the end I can only truly learn from experience/trial & error, I want to take in as much as possible. That's why I took a position with a very successful host. The experience has opened my eyes quite a bit, but I'm not sure I like what I see. (Overselling)
I was told by a multimillionair, web host owner that "you can't do it without overselling", which of course I disbelieve. I know that's a whole other can of worms that I shouldn't open, so I'll leave with this;
I am not discouraged, not in the least. Just lost. Any guidence would be apreciated.
Simply hosting customer's web sites? Or, are you including leasing managed and unmanged dedicated servers, and possibly colocation services?
With leasing dedicated servers and colocation services... it can be much much easier to start off small, be profitable quickly, and not have to do any level of overselling.
The profit you make in selling dedicated servers/colocation in that way is through the added professional services you provide to your customers.
I meet frequently with all my dedicated server customers. I try to really understand their business, their problems, their goals, and what I can do to help them excel.
I want my dedicated server customers to become successful so that they need more bandwidth and eventually need multiple servers.
How you will become successful is how well you can justify the premiums you charge.
For example, my customers fully understand that if I'm paying $30/Mbps from my upstreams, that I'm going to sell it to them for $35/Mbps because they see the many benefits of getting services from me and are willing to pay the premium.
I think the same principles also apply to smaller hosting of web sites as well, however a lot of what you'd be doing in the hosting of smaller web sites is more what I consider "web design" work, something I personally am not interested in.
A problem that the industry has a lot of right now is too many hosting companies ran by people who seem to have little technical knowledge.
There's way too many people here where the though process/business plan for starting a web hosting company was:
1) Too much money on hand.
2) Obtain a reseller hosting account, or Lease a dedicated server/VPS
3) Setup cPanel