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starting new hosting business

starting new hosting business

kristalkristal Banned
edited October 2011 in Tutorials

ok so i got some money and inspiration, whats next? what do i do, how do i go about this? :-)

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  • From someone who did the whole hosting thing for a few years, my own opinion is - give up and walk away and I'm not trying to be funny.

    If you don't have the time (and you will need lots), lots of money, a market ready to go and some understanding of hosting, sysadmin and networking (which I am only guessing you don't have from your initial question - again not a dig at you, just me guessing!).

    You will have to work your nuts off to even try to break even look around here for the deals that are being handed out, how would a new host make profit when trying to compete against that.

    Not trying to put a downer on your plans mate, but think long and hard - its a long way to hit profit!

    Currently using: LoveVPS, HeroicVPS, SecureDragon, Crissic, FTPIt and VPN.sh

  • If you have money but don't know how to do things, why not invest in another small VPS company? There are always people looking for business partners.

  • From someone who did the whole hosting thing for a few years, my own opinion is - give up and walk away and I'm not trying to be funny.

    +1

    No offense but if you can't google for how to start a webhosting business...

  • Just to add to my doom and gloom post above, if you want to test the waters go step by step. Buy a reseller account with a decent provider (look at service, not price) and see if you can fill that up with clients and give a decent level of support as well as having some resemblance of an offline life as well.

    If that goes well, set up a VPS with cPanel or Directadmin and get that filled up.

    From there you can either go dedicated or buy a few VPSes for a bit more reliance.

    Whilst on the reseller account, get a VPS and whatever control panel you intend to use and use it, maintain it, get to know its deepest workings inside and out. You don't want to be learning things at 3.30 on a Sunday morning when something breaks.

    If you do go for it, good luck :)

    Currently using: LoveVPS, HeroicVPS, SecureDragon, Crissic, FTPIt and VPN.sh

  • The inherent problem with new hosting businesses is the support and price. Too many established companies with many many employees to back them up. If you can not offer the level of support needed (which is a lot usually) the people will go where they can get it.

    If you do not have the ready cash for support, advertising, branding, etc... it will not be a pleasant experience. There is no way someone can run the entire host themselves. If they try they usually burn out quickly and end up losing customers because of service and support issues.

    I have been around the block a couple times and seen this exact thing happen to otherwise good companies. Too many roles play into have a successful company for one person to be able to manage it all. Something will eventually give and it is usually where it hurts the most.

    Not saying it is a bad idea or the idea will not work but with companies like godaddy and others with the capital and prices to be able to deliver the goods the chances are small that it will succeed. No offense intended but you need to look at the whole scope of the venture and not just the little parts.

    AuroraZero's Web | AVM | Available for System Security Work PM Me | Have YOU heard of the Machine?

  • kiloservekiloserve Member
    edited October 2011

    Unfortunately, the doom and gloom aspect is correct and we're not just trying to scare away competition.

    We've been at this a long time and I can tell you in the first couple of years, there have been some VERY thin months where we almost quit doing this business.

    It's a hard market to break into due to the amount of competition. When we broke in there was already a large competitive market. Today, the amount of competition is 2x-3x as high as it was back then.

    Unlike the economy (which keeps raising prices), hosting prices have actually gone down quite a bit. We used to be able to charge 5x as much as we are charging now for the same service.

    On the positive side, if you can make it to 3-4 years, you're pretty much set and will probably be able to make a living off it.

  • We used to be able to charge 5x as much as we are charging now for the same service.

    Actually if you market yourself and/or provide a service that's not given elsewhere, you can get away with it.

    I charge $7.95 a month for regular hosting but we're fully managed as we do pretty much everything for a client except provide content. Folks leave on occasion for one of the many "fully managed" services out there but it's something like 70% that they'll return within 3-6 months. :)

    Not bragging. Just providing an example. If you can find a niche, you can do fairly well. If you're just a cookie cutter service, well....

  • That is an example of having the staff and resources to do such a thing. If you do not have it then you will likely run into problems. Of course if you can find a niche or carve one out you will most likely succeed but that is one big IF. I still am not saying it can not be done but it will not be easily done. It will take a lot of hard work time and trial and error most likely.

    AuroraZero's Web | AVM | Available for System Security Work PM Me | Have YOU heard of the Machine?

  • ok just curious, what sum $ are we talking about here?

  • More than $1K at least. Minimum is $500USD, but that wouldn't go well.

    LoomHosts VPS Servers - Dallas VPS | Reliable, Affordable, Solid
  • I would say not less then 5k myself. You will definitely need the cushion. You will have to pay people and in the beginning no income. As kiloserve stated times will be lean and you will need that backup.

    AuroraZero's Web | AVM | Available for System Security Work PM Me | Have YOU heard of the Machine?

  • I was always told that 6 months to a year stashed in the bank is a must.

    I started with about $75k in the bank but that was a loan against one of my trusts. Part of that was also going to be a down payment for a house.

    That money was when we decided to go "full time" with the hosting. Going part time and with a real income, you can get away with a lot less.

  • XeoncrossXeoncross Member
    edited October 2011

    Paying a developer to make a simple web app would be a better use of your money. Better yet, quite your job and live off that money while you learn to build a web app.

  • I hesitate to suggest quitting ones job to become a developer. You never can tell if things will work out and you won't have anything to fall back on.

  • I think that you have to write down a minimal business plan as you would do in every business market you decide to fight. If you have money then you can try to do things right from the start.

    IperWeb & Prometeus, Hosting Provider since 1997. iwStack cloud infrastructure
  • Nice bump bro.

    Proud member of the VPS Collectors Club

  • If you are well funded and don't suffer serious hardware/software issues you should be fine.

    Can you setup a free server like buyvm did and have it gangbanged by all the freetards at LEB to see if it will survive before going live?

    If you are on a small budget then you'd better be lucky.

    Do you feel lucky, punk?

  • ztecztec Member
    edited January 2012

    If you got some money, passion for anything in life (doesn't matter what) and are willing to work hard for a couple of weeks. I recommend you'd try the eBook business, it's by far the easiest way to make money. Do it in your own language and target your own country. Good luck - you'd have to do the research yourself, I don't recommend buying "Business-in-a-box"-type of solutions. Again, good luck.

  • @ztec said: If you got some money, passion for anything in life (doesn't matter what) and are willing to work hard for a couple of weeks. I recommend you'd try the eBook business, it's by far the easiest way to make money. Do it in your own language and target your own country. Good luck - you'd have to do the research yourself, I don't recommend buying "Business-in-a-box"-type of solutions. Again, good luck.

    More like bullshit scam artist, this isn't called a business

    Postgres

  • I would say if you can overcome marketing, then you will be ahead. The concept of hosting anything is niche. We spent a couple $K in advertising on Facebook and Google Adwords in 2011 and got: 3 customers.

    Hosting is like dog food: not everyone needs it, and once they've started, they're sticking with one brand :)

    I am no longer affiliated with IPXcore.
  • @Damian4IPXcore Well, as long it's good dog food, people will stick to one brand indeed. Else, you've might end up hopping to 6 different hosts before you've found the right one (for a simple shared hosting package). Been there, done that.

    Linux noob willing to learn.

  • @Damian4IPXcore said: We spent a couple $K in advertising on Facebook and Google Adwords in 2011 and got: 3 customers.

    Ouch!! can it really get that bad??

  • Do you have some sysadmin experience? Would you do that for fun or just for money?

    If you can do all the sysadmin/dev yourself well, just buy a good vps node ( around 2k dollars) and start your thing. The machine will be paid in a couple of years if you have a minimal number of customers. If you don't you can sell it second hand or rent it as a dedicated. Ayway, find a place where to colo it & get IPs and you're pretty much gone.

    Avoid SolusVM/whmcs, do something smarter / more secure & more personal, and good luck.

    It doesn't work? Sell the server, you didn't loose that much. It works, the server did pay for itself + the bandwidth + you even managed to make some money? Buy more servers & keep going...

    Don't listen people that tell you not to go in the business. sure it won't be easy, but if you don't try you can't achieve anything!

  • @justinb said: More like bullshit scam artist, this isn't called a business

    What?

  • Buy a pizza instead.

  • First I wold make sure that you know what your doing. You need to have more then the first months amount of money, you need to be sure that you can keep it up with $0 income for a few months.

    Then you should make sure that you can setup a server, I would use a old computer laying around your house, install centos 6.2 minimal on it and mess around.

    From then on you just buy real servers and colocate, or rent them.

  • @AuroraZ said: Of course if you can find a niche or carve one out you will most likely succeed but that is one big IF.

    I think that's an important point. A great niche market is your city/province/state. Lots of people & businesses will opt for a local entrepreneur instead of a faceless company on the Internet. Of course, it's also important for you to prove yourself trustworthy :)

  • Why te heck someone resurrected this post from this banned troll?

    And now everybody is posting? (including me).

    I hope this will be the last post u_u

  • My fault, I didn't notice this thread was a bit old :-)

    IperWeb & Prometeus, Hosting Provider since 1997. iwStack cloud infrastructure
  • vedranvedran Moderator

    Wasn't kristal from UptimeVPS? >_<

    Your ad here
  • @vedran said: Wasn't kristal from UptimeVPS? >_<

    I think he was the guy who was always saying how great UptimeVPS was, and that he trusted them when everyone was saying how sketchy they were. So he probably was with them/the owner.

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