Why dont I see hosting as "Get Rich Quick?"

[MMiz]

Hey :)

I've hung around these forums and others for a while now, and one topic continues to baffle me. I don't understand how some see web hosting as a get-rich-quick business. I've even discussed opportunities with accountants and they all agree that hosting just isn't one of those businesses. A few major points kept coming up, and I don't see how others don't see 'em.

1. "Benefits". Going into education I understand the wealth of benefits that will be available to me. That just isn't possible when hosting. Retirement plans, tenure, belonging to a union, and job security rarely come up when people brain storm business plans. All those health insurance, credit union, and other great "freebies" that are available to many jobs are not included with the self-run business. I think many forget to weigh the "non-monetary" benefits when calculating how much they can make. Sure it isn't cash at the end of the week, but try paying medical bills without insurance (they don't accept meal points).

2. Work Hours. I don't think people realize how many hours have to be put into the hosting business. Its not a 9 - 5 job, and there are no holidays. I've seen companies that have planned for other issues forget this, and it can quickly become overwhelming.

I understand that 90%+ of these "Businesses" are run by kids who have too much time on their hands and enjoy the computer, but the math still doesn't make sense. If I worked for $6.75 an hour at a local store for 40 hours I week I could probably be making more money than someone who charges $5.95 a month for hosting services. Of course I'm speaking directly towards the younger hosts, but even for the older ones, why not get a more conventional job?

3. Commitment. As I start to make my own business plans for a domain business in conjunction with other services, this is one of the main issues that worries me. I'm not sure I want to be handling 250+ domains year after year. How can kids age 13 - 18, many still going through puberty, know what they will want in a year? This is where the business plan comes in, but I doubt most "companies" have them. What happens when hosting isn't fun anymore? I'm noticing more and more hosts pulling a "Timmy" shutting down, taking the money, and then start a new scam. Why do I feel like I'm the only one that understands this? Even at this age I wonder if Ill be able to provide support for the services I offer. That goes into my pricing considerations and whether I should join affiliate programs or sell the product myself. Anyone else have these worries?

4. Maturity. I'm going to get a lot of crap for this, but I truly believe that no person under the age of 18 should be running a hosting business. I don't care how "mature" you are, but it just doesn't work. Customer service skills are often lacking, and there is more to this company than just running a server. With the lack of maturity comes the lack of business ethics, and I think many forget that web hosting is a service, not just making sure the server is working. When you're 18 there are very few legal repercussions. I don't understand how these people under the age of 18 are signing server contracts or accepting AUP or TOS. Its just not legally possible. Being under the age of 18 is business respects is like the "get out of jail free card." Why does this continue? Why isn't this a topic of discussion more?

And with that I'm done ranting for now. Does anyone agree with me? I only bring this up because the more and more I read "forums," the more and more I question my practices. Fortunately I have friends who have successfully run businesses, and others to have not. I think I've learned a lot from their experiences, and am glad I have their opinions. So what do you think? I know I threw a lot out there, but I can only hold it in so long. :soapbox:

-Matt

[Chicken]

MMiz, every point you made is just complete and utter :bs:

Just kidding!

1) If you run a business, you can get health insurance, but it isn't cheap. To provide it for your employees, is expensive.

2) No hoildays, no weekends, no vacations, not much sleep. If you do get out, you have a pager, cell phone and laptop with you at all times.

3) Commitment and perseverance. Running a business and overseeing other people's web sites isn't something you just do for fun, unless you are hosting personal sites. While you don't have to provide services forever (no one said that), I have seen some horrible mismanaged hosting operations (being generous calling them 'operations').

4) That and the fact that there's a big world out there and why anyone would want to waste the best years of their life, or at least the years that they have the most enery, heh, to sit in a chair staring at a computer... :rolleyes: You might as well devote a couple years to watching daytime television while you're at it.

[James]

ok time for me to chime in here.

1. the reason i am starting a hosting business is to get away from the :BS: of working for others to makw them rick while i stay poor.

2 yes i know i will not make a ton of cash right away i have planed for , im hoping here, at lest 99% of everything that can go worng or good.

3 i do have plans to stay working at my real job for as long as needed untill i can provide enugf income for my self and be able to higher a tech or two to help out. again planed out for long term.

as for the others who just hope to make a quick buck and just do 9 to 5 ehe they wount last long.
i work on the business even tho it is still in preelaunch stage about 6 to 8 hours a day dealign with clients i got to help me get a fell for it insted of readign about it on here and other forums.
i all ready know sleep is going to be hard to come by but as long as i can get a cupple of nights of good sleep ill be fine for a while.

ohh btw im 29 not 18 and i did about 1.5 to 2 years of research into this before i even considerd to have my site designed or who i would go with for a provider.

now i just hope that 1% i ahvent thought of or read about yet doesnt show up to soon :)
i will now get off my :soapbox: and let others speek who might have more feed back on this.

[ljprevo]

My question is this?

Do you have anyone else that will assist you while you are at work?

If not, what are you going to do if a server goes down?

[James]

yes i do have that coverd for now as i am a reseller for now. but with plans to get my own server as soon as the business can support it. when that happonds i have a cupple friends who will help out on the server as needed. also plan on a few other things when i get my own server.
and the server might be a semi managed as well, from my provider, so that will help out even more.

I have that coverd as well as tech support for when i am at work.
I am hoping to grow at a stedy pace for the long term and not ahve an exploshion of clients to the point where we cant handle the support side of it for eather the server or support for the clients.

time will tell tho.
maby if chicken will alow it ill start a new thread and keep people updated on how things are going
and you can watch a new webhost grow from a reseller account to there own server(s).
laters
James

[Chicken]

James, actually let's get together (off board maybe) about your post above as I'm looking for a few people like that. I'll fill you in when we chat...

[MMiz]

I wont take this too far off topic, but I personally believe that people who start off on reseller accounts have a better chance of having a successful business. Why you ask? With a reseller account it allows the person to learn. They usually only have to upgrade to a dedicated server when they are no longer able to host their accounts in a shared hosting environment. At the point if the prices are reasonable, then there is little problem affording the dedicated server. I actually admire people like that, and many of the most successful people started off on reseller accounts. I think you'd be surprised to see some of the people still on 'em, even after having hugely successful products with large bandwidth consumption.

Why does everyone feel the need to purchase a $99 server when their income level is $0? Why not start with a reseller accound paying ~$40 a month with everything managed including cPanel? Sure you are at the mercy of the reseller, but if you choose a quality one (I know of many) you shouldnt have a problem.

Comments?

[interactive]

Originally posted by Chicken:

James, actually let's get together (off board maybe) about your post above as I'm looking for a few people like that. I'll fill you in when we chat...

Ol' Chicken starting a hosting company eh?

[MMiz]

When looking for a new host there is one major thing I take into consideration. This has always separated the more reliable hosts from the ones destined to failure. I want to make sure my host depends on the money they receive from hosting for their income. I dont want a host that does this for a hobby, has a couple hundred bucks in a savings accounts and is all of a sudden going to be a host. I want a host that has to pay the bills with the money they make from the company. It seems that all the hosts that Ive ever been with (more than 10), my little rule has held true.

The only exception from this can possibly be RippleHost, though Im not quite sure of their entire situation, Alan doesnt like to frequent the boards too much. With them only time will tell too, and we'll have to wait and see.

Anyone agree or disagree with my theory? Just wondering :)

-Matt

[James]

MMIz,
i can get you hrmmm 11 people who would tell you other wise right now abou how much i care about the hosting i do for them. If i see them on irc i ask them how things are going. if they send a trubble ticket i do a follow up to make shure the problem is realy fixed and they didnt just give up on it.
i do care about my clinets a few of them have become friends. (but when there bill si due they know its business as all ways) i am hoping to build a hosting comp that will grow slow and still be able to ask my clients from time to time who are things going with out doing a mass e-mail to all of them.

we now retrun you to the topic at hand.
if you would like to comment ferther on this we can pub it or take it off bord viea icq or yahoo
laters
James

[Chicken]

Originally posted by interactive:

Ol' Chicken starting a hosting company eh?
No, no, no, plans for that (today at least). A few months ago I had an idea to follow a reseller (I actually think she hadn't made it to the point of being a reseller yet), and see what happens. I lost touch with her though. Need to find a few other James's (or others at the pre-James point in their hosting careers).

[Barbara]

If you're interested, I'm almost at the same stage as James.

[Living Media]

Same here - reseller, few assistants, don't want a client explosion, but prefer steady growth.

[ljprevo]

Myself as well, kept and still try to keep my relationship on a personal level with my customers, but as I have grow that is getting harder to do.

You know how many customers I have by the name John? :eek:

[Homeiss]

I'll tell you one thing, a reseller account is the best way to start (in my opinion), you can learn a lot about hosting, it's affordable, it's "managed," and so on, one thing is that you must find a good host, this is key (I found this out). I started on a reseller account and worked my way up to bigger and bigger accounts till I made the leap to dedicated servers, I would never have just went out and got a dedicated server then start hosting, you have to plan and think about what you can and should do.

Anyways, wow, sorry to be off topic.

[Rewdog]

When I used to do Web Hosting Radio we had a "startup show" and did about 3 or 4 shows on how to start up a hosting company, and a woman with my help was going to have a sort of reality hosting bit while she started her hosting company. It fell through, mainly because I think she felt way too intimidated by the whole thing to go ahead with things without me holding her hand :p:

It was pretty interesting, and I got 3 pretty good domains outta it.

[RRolfe]

That was a good show too... Every tuesday.

:)

[Rewdog]

Holy cow, someone remembered?!?!?!? :eek: :p:
Rakmin is :cool:

[RRolfe]

ofcourse i remembered...

infotainment calls, the "startup" startup show...

heck, at one point i was even talking to you about DJ'ing. Even won a contest on there once.

oh, the good times.

[Chicken]

Ahhhh, but the Dog sold out. Dirty dog he is now... ;) :D

[interactive]

Ya wish you hadn't sold it ;). Any idea if Robert Marsh is going to get some shows going?

Edit: Typoes....

[Rewdog]

Hehe, dirty dog with money:banana:

Well he said he wanted to get things going by March 1st, and old DJ's would be able to do shows by then. Of course when he said that he hadn't bought hostingtech.

[Robert]

Web Hosting is a Get Rich Quick Scheme.

It takes time, dedication and hard work.

But if you keep at it, you will eventually start making a nice profit per month (my definition of "nice" is $1500-$3000 a month, with all the services paid off by the profit and a little play cahs for you and your associate).

Eventually, VeroHost.com will be up there. It's simply matter of time.

[acidhosting]

I`m new in Hosting and it isn`t an easy business to jump into, I`ve layed out time and money and I`m getting my site out both via posting and word of mouth, I feel that good support is the key and thus customers will spread the word, many dummy orders have arrived but its not a turn off I see it as part of the course and I`m more than willing to stick with it, submitting to the host directorys is a good way to go too. als many people seem to compare low hosting prices and think that they have to go that way I don`t as you can have a host offering cheap hosting and crap support thus loosing in the long run and also how long do these cheap hosts stay active, a note to chicken - I have followed you over the other side for along time and wish you well in your venture, this board was a nice surprise and I`ll be here for a good while. :)

[GnomeyNewt]

Hosting is truly a hard business and I for one wish I knew about it more when I started. I went into it completely blind. I started to sell packages that my first host offered to my design clients, I got to about 10-15 and it became quite overwhelming having them through my host as I had to sell their plans and pay individually for each one (I got a good discount though). So I moved to a reseller account and started to offer hosting as an open service on the site, I didn’t before. Now 2 years later, I’m running a hosting company, not a design company. :cry2: I said forget it, I’m completely unhappy because it sucks up all my time and leaves no time for design/programming. Today as we speak I no longer run a hosting company but I am still interested in running one, because I’ve actually got nothing to do now. But hopefully I wont trick myself. :c)

I think many people agree with you Mmiz, but unfortunately we have no control over what others do and everybody comes into this business for different reasons. The horrible thing about it is that online businesses are not regulated yet, so you can start a company up pretty easily, you can also disappear really easy. It’s a nightmare for everybody, resellers and clients alike, and even higher up the chain because you never know who is going to drop the bomb on you. These message boards really do help a lot and I’m sure do show a lot of people the hard work and dedication it takes to run one.

Rewdog, I remember those radio shows. I remember trying to help pick out the logo.

[Rewdog]

yeah, I remember you yelling at joe, that was hilarious :clap:

[Robert]

sometimes when I am online, I say to myself "why do I have to own a hosting firm?". Why I can't I be like the other 70% of Internet Users who come online, check mail, chat, surf the net and than get off.

Than I realize why. Because I love doing it. It may not be a "get rich quick" scheme, but I enjoy doing it. I enjoy providing people with a service and I enjoy knowing people Trust Me.

[picindex]

Originally posted by MMiz:

Hey :)

I've hung around these forums and others for a while now, and one topic continues to baffle me. I don't understand how some see web hosting as a get-rich-quick business. I've even discussed opportunities with accountants and they all agree that hosting just isn't one of those businesses. A few major points kept coming up, and I don't see how others don't see 'em.

1. "Benefits". Going into education I understand the wealth of benefits that will be available to me. That just isn't possible when hosting. Retirement plans, tenure, belonging to a union, and job security rarely come up when people brain storm business plans. All those health insurance, credit union, and other great "freebies" that are available to many jobs are not included with the self-run business. I think many forget to weigh the "non-monetary" benefits when calculating how much they can make. Sure it isn't cash at the end of the week, but try paying medical bills without insurance (they don't accept meal points).

2. Work Hours. I don't think people realize how many hours have to be put into the hosting business. Its not a 9 - 5 job, and there are no holidays. I've seen companies that have planned for other issues forget this, and it can quickly become overwhelming.

I understand that 90%+ of these "Businesses" are run by kids who have too much time on their hands and enjoy the computer, but the math still doesn't make sense. If I worked for $6.75 an hour at a local store for 40 hours I week I could probably be making more money than someone who charges $5.95 a month for hosting services. Of course I'm speaking directly towards the younger hosts, but even for the older ones, why not get a more conventional job?

3. Commitment. As I start to make my own business plans for a domain business in conjunction with other services, this is one of the main issues that worries me. I'm not sure I want to be handling 250+ domains year after year. How can kids age 13 - 18, many still going through puberty, know what they will want in a year? This is where the business plan comes in, but I doubt most "companies" have them. What happens when hosting isn't fun anymore? I'm noticing more and more hosts pulling a "Timmy" shutting down, taking the money, and then start a new scam. Why do I feel like I'm the only one that understands this? Even at this age I wonder if Ill be able to provide support for the services I offer. That goes into my pricing considerations and whether I should join affiliate programs or sell the product myself. Anyone else have these worries?

4. Maturity. I'm going to get a lot of crap for this, but I truly believe that no person under the age of 18 should be running a hosting business. I don't care how "mature" you are, but it just doesn't work. Customer service skills are often lacking, and there is more to this company than just running a server. With the lack of maturity comes the lack of business ethics, and I think many forget that web hosting is a service, not just making sure the server is working. When you're 18 there are very few legal repercussions. I don't understand how these people under the age of 18 are signing server contracts or accepting AUP or TOS. Its just not legally possible. Being under the age of 18 is business respects is like the "get out of jail free card." Why does this continue? Why isn't this a topic of discussion more?

And with that I'm done ranting for now. Does anyone agree with me? I only bring this up because the more and more I read "forums," the more and more I question my practices. Fortunately I have friends who have successfully run businesses, and others to have not. I think I've learned a lot from their experiences, and am glad I have their opinions. So what do you think? I know I threw a lot out there, but I can only hold it in so long. :soapbox:

-Matt

1) Not true. When it was just myself I had insurance and everything paid for as a business expense. What your describing sounds like a business that was not formed or set up properly.

2) 1 thing I agree with you on. My hours are 10:00AM - 2:00AM 7 days a week. I maybe take 2 days per month off. I love every hour of work!

Second part - lay off the age thing already and at $5.95 per month hosting is not even worth it. I don't know why people charge this - they are never going to make any serious cash. It would take you 1,000 shared hosting customers at $5.95 per month to barely make $6,000.00. To provide support to 1,000 shared hosting customers would not make that $6,000 even close to worth it.

3) Again - lay off the age thing already.

Any and every business should have a business plan - if not they are setting themselves up for failure at some point or another. As far as providing support - I don't see how you figure a younger person cannot provide support. When your young you can learn things quicker and you have way more energy. I have an employee who just turned 18 that is my lead system administration (he manages 2 others - one who is 27 and the other who is 34). This guy is a nut and know everything and anything about Unix and Linux and the 2 other employees who he manages look UP to him. This is a prime example of why your wrong. What your calling "kids" today are on the computer at school and most all I see everyday outside school. They are growing up on them - Not sure how old you are but I'm sure you did not grow up on computers like we are today.

4) Do you want a prime example of why you are wrong? Microsoft. Bill Gates was driving to IBM in a Taxi because he was not older enough to rent a car. Today we all know his status.

I can also give 4 examples (5 if you count myself) of people who started under the age of 18 and today they are all (including myself) under 21 and make 6 and 7 figure incomes per year.

How can we sign papers? Not sure about everyone but in some cases they had mom and dad sign on the account and business. In my case I was declared a emancipated minor giving me all the benefits of being 18 at only 16.

Do I agree with you? Nope because you are completely wrong. Granted you will get the 16, 17, 18 hell even 20 year old *******s that think they are going to concur the world -most of us "kids" know more then you, can learn faster then you, and have a bigger drive then you - especially once the real money kicks in (when they start making more then mom and dad combined).

[MMiz]

picindex,

If you dont mind me asking, being the skeptical person I am, can you name or give a link to your web hosting business? Im sure many will disagree with the points Ive made, but I was just sharing my thoughts on the kind of business Ive seen in this industry.

Do I think minors should be running businesses? Sure, but there is a legal right way to do things, and then there is the easy way. I know few minors who do things the "right" way. You could be one of those exceptions though, but they're rare.

[acidhosting]

"sits back thinking of little B Gate`s running hosting companys" alittle frightening, keeps the courts in business though.

[Binx]

The one thing I do agree with is, a Hosting business is not a get quick rich gig. A lot of blood sweat and tears go in to running your business if you do it right. To all of you youngsters out there I can admire your dedication to starting your own business. I know from experience that starting small can lead to something big. When starting in this business 6 years ago we went from 2 servers to where we are today, owning our own data center. Did it happen quick? Absolutely not. Do I have a lot of free time? Hell no, I still put in 10 -14 hour days. But I can speak for myself that it is absolutely worth it. I truly have a passion for my job and love every minute of it. It is a little disheartening to see tall of the scammers out there or the ones that really don't give a damn about their business. But I wouldn't say that category is held strictly for the 18 year old and under. To all of you newbies out there. If this is a business you truly love, hang with it and you should go as far as you want to :)

[James]

yep i agree.
as im slowly putting things togeather with my designer im hoping everything will work right once i go "live".

and yes i do have to admire you, the younsters, as well I i know what it is like trying to set things up, making deals for advertising ect ect. it can be a BIG pain some times. just stick it out and you will grow as long as you care about your clients and the servers you will be fine.
best of luck to all of the hosts that are out there now. look for me to com knocking on your door in a cupple years to buy you out :D JUST KIDDING!
laters
James

[Locke]

Well, I found a few things in your statements offensive, but no point in getting all mad about it, I'm fully aware of what I'm capable of.

1) Maturity. I started in web hosting when I graduated in 98, I was 16. You may think that someone <18 is incapable of running a web hosting business, and in 95% of your cases, you are correct. However, there are companies run by such, who are fully capable, and know exactly what they are doing. I've studied web hosting, and looked into the market going on 5 years now, and I still don't know everything, but that's the beauty of an expanding and growing industry.

2) 95%+ of the business are not run by kids, that number isn't even close to accurate. However, a good size of the unlimited and cheap hosts are run by kids, but with every profiling, there are of course exceptions to the percentile at hand here.

3) Commitment is one thing I've always been about. I started off locally, and I manage 175-180 clients. Now those are all local, therefore, I was able to concentrate more. When I move the company to an e-commerce profile, the load will be much more. I think if you are able to be into what you love, and able to perform, commitment will be second to none of what you are fully capable of.

4) Final notes, you are right in some aspects, but you can't always profile in everyone as a stereotypical person/company, it's just not fair. Yupapa is 18, and he runs a sound and solid business, and has a very good control panel which I believe is coded in-house by him, and you think it's not possible? There are many exceptions to the rules you have laid out, but that is a clause with every industry, not just this one.

[James]

locke,
ohh i do agree man. ive seen some kids who can run any business run loops around me.
yes there are a few bad apples out there but were not trying to say "who" that bad apple is.

I think this stems from the postings on that other bord where you see
get unlimated trafic
e-mail's
hard drive space
for 1.00 a month or 10 bucks a year!
now that could be from a teen who just wants to get his name known or from someone who thinks hes gods gift to the hosting world.
ive also just ran accross a web hosting comp that still charges 1990's rates
ie 5 megs of space
1 gig of bandwidth for 55 bucks a month i was like WOW:yikes:
now if i could only get away with that:)
:D
j/k

[101sales]

The Gamble - well at least i'm hoping - is i'll be bought out by a bigger guy or i'll become the big one. Hosting is not a get rich quick scheme nor has it ever been one. The only reason why you see so many providers now is because of the access and ease at which 2-bit companies are able to just start up and close down like a bad habit. And no matter what WHT says - that is by no means a measure of the hosting industry. It's unfortunate that some people think that way.

Everyone i've talked to thinks the hosting industry is doomed to collapse once everyone has a website.

Well they were telling themselves that back in the '70's when everyone appeared to have a car. Now the automobile market is as big as ever. Go Figure.....

New technology will always be available for people to expand on which makes hosting a very viable business for the very long term future as people move from host to host looking for better features and better prices.

I can't stand the overnighter businesses - not only do they make the hosting industry a very volitile industry, but they trick the naive customer into thinking they just found an awesome deal. Unfortunately that person is left finding another host within a couple months. The viable ones are those who have worked out the numbers and know for a fact that their expenses don't out do their income. It's those who have been in the industry that know what it takes to be a viable company but in a consumers world price always speaks before reason.

[Dapon]

MMiz I agree with you. Although others here disagree with the age thing I think you make some valid points. People under the age of 18, in general aren't mature enough to make business decisions. Now before you get pissed off picindex note that I said most. You give the example of Bill Gates, but wouldn't you agree that he is the exception and not the norm? And you might have the maturity to run a business yourself, but what about the rest of the kids at your local high school? Would you trust your business to them?

I am an old man compared to most of the people in this business. I just turned 45. I have been in the hosting business since 1997. I started with Verio and was with them for 5 years. Did very well with them, worked my way up to sales manager and was always a top producer. And I still was nervous about doing this.

Not saying a teenager can't do this, just saying I have seen many more fail than suceed. And it makes it harder on the legitimate comapies. On another forum there is a kid that is well known to everyone. He starts a company, takes money, and folds only to open under anothe rname soon after that. Because he has no reprucussions. Not to say that some adults don't do the same things at times, but it is less prevelant than when HighSchool Hosting opens up selling hosting fo $10/year.

Don't take this wrong picindex. If you are doing things right, good for you. Keep up the good work. But just you are mature enough to do it doesn't mean all teenagers are. If they were we wouldn't need a law saying you aren't an adult until you are 18. And as you get older you find out you really didn't know everything. At least I did and what a shock it was to me.

[Alan]

but I truly believe that no person under the age of 18 should be running a hosting business.


Splashhost was started by someone who was age 16 at the time(Points to self)