Big Companies Can No Longer Compete With Me

[webling]

MOD NOTE: Due to promotional nature of the original post by @webling, which is against the rules of this community, I am re-writing it to deliver the main essence of it in order to keep the discussion alive.

In his post, webling mentioned that he has come up with a fresh business model that is showing a lot of promise and is showing early results at that. Contrary to a traditional model, in which a client pays the same monthly fee, his model rewards customers by lowering their monthly fee with time. The longer they stay, the lower it goes. webling also makes a claim that he is now able to compete against the cheapest companies in the world and that they are unable to compete with him.

The discussion below is what came out of this.

 

[adroitssd]

So self-promotion?

 

[DigitalBS]

So self-promotion?

Basically, But what do you mean you outsourced the front end though?

 

[HostColor]

This is a second thread in which you have said that your are gouging customers. Good luck with your business!

 

[ughosting]

I've looked at your pricing, so your free tier has a $20 setup fee.

Most hosts don't charge setup, so your free tier is actually $20 a year, but they must upgrade to your Starter the following year and that's $10 and $20 setup fee.

This actually equates to $50 for two years hosting for a single domain.

So when you say you compete amongst the cheapest, this doesn't ring true.

Hostgator's Hatchling plan is no more expensive and offers a whole lot more disk space and bandwidth.

Now you might be able to compete with them on support but at these prices for a small company, you'll have to work very hard for little to no return.

Good luck with your business though, but be careful with the claims that you make, they could be your downfall.

 

[PeterShene]

Yeah I also looked at his hosting plans and its not competitive in terms of cheap. Look this is like any business wherever you are getting your " product from to resell" the more you buy the bigger discount you will get the cheaper you can offer it as and make a profit.

There is no realistic way in which you can compete against this without finding something completely new or running at a loss.

What you do have over them is support. I dont do hosting full on its not my mian area but i dabble in it. What ive noticed is good personal support is a great way to seperate yourself in the web design hosting industry, i often design a website and give really great support and those clients will get hosting which i resell and 3 times the price from me even though they know they can get it 3 times cheaper elsewhere.
What you are facing here is not easy its something all sectors are facing and thats that corporates kill off smaller businesses.. essentially you need to make use of your size big guy have to run through alot of red tape to make changes and adpat new lans address clients ect ect whilst as a small business you can do it relatively fast. YOu can react to a situation where they can only try prepare incase it happens again.

 

[webling]

I've already pulled one customer off WIX, working my second one.

I know that nobody understands this business model yet, and I am not going to reveal my secrets. But after I set this up, I instantly began getting orders. Until you see it as customers do, your business model won't work.

I did my math, and my business model over a 5 year span will beat most web hosts and I offer higher than level 3 tech support because as the owner I do all my own sales and support. And it's working.

'nuff said

 

[ughosting]

I think 90%+ of the hosts here offer "tier 3" support, so I'm not sure that's enough to differentiate.
We've worked on Banks, Airlines & Telco network projects and web applications, both design and implementation, but that doesn't make us particularly special in terms of hosting support.
Hosting is a sideline, in that we use the platform for corporate projects and lease out the extra capacity at a profit for hosting.
That's why we no longer have a big shiny website, as we mainly target resellers and not individual users.

 

[easyhostmedia]

I've already pulled one customer off WIX, working my second one.

Not hard for anyone to pull customers from these free web companies as these are limited unless you pay OTT prices.

 

[OVHcloud_Phil]

Isn't self-promotion supposedly against these forum rules?

*3.4 Participants may not post or otherwise transmit promotional materials, or any other form of solicitation, except in those forum sections where advertising is expressly permitted.*

It seems, pretty close to me.

 

[bigredseo]

I did my math, and my business model over a 5 year span will beat most web hosts

From what I can gather, it's similar to what Allstate Insurance offers in that if you remain accident free, your premium goes down.

From a web hosting perspective, the longer you are with the company, the lower you would pay. It's an interesting reward system, but it's entirely built on the idea that your new customers will be able to foot the bill for the older customers.

Keep in mind, an older customer should generally be growing the traffic to their website, so in essence, they SHOULD cost you more in bandwidth and CPU resources - how much will depend on how you're measuring.

My big concern with this approach is that it's a "house of cards" scenario. If one part fails, the entire fails. Should the datacenter you're rending from raise their rates beyond what you projected, and the inflow of new customers dies off a little, you're left with a promise on the table that you can't deliver.

As I said, if I read the idea right, then I like the idea behind it, but the practice may lead to bigger issues in future years. Fingers crossed for you!

 

[webling]

From what I can gather, it's similar to what Allstate Insurance offers in that if you remain accident free, your premium goes down.

From a web hosting perspective, the longer you are with the company, the lower you would pay. It's an interesting reward system, but it's entirely built on the idea that your new customers will be able to foot the bill for the older customers.

Keep in mind, an older customer should generally be growing the traffic to their website, so in essence, they SHOULD cost you more in bandwidth and CPU resources - how much will depend on how you're measuring.

My big concern with this approach is that it's a "house of cards" scenario. If one part fails, the entire fails. Should the datacenter you're rending from raise their rates beyond what you projected, and the inflow of new customers dies off a little, you're left with a promise on the table that you can't deliver.

As I said, if I read the idea right, then I like the idea behind it, but the practice may lead to bigger issues in future years. Fingers crossed for you!

You are the first who is at least starting to get it. Most people don't realize I'm not in it to make money. A little will be okay, but I will be happy if I cover costs with a little extra to boot. I've done the math and with what I have set up if I get enough customers I should be able to do it. Much of my ambition is to make web hosting so affordable for clients is that it will knock the companies out who want to monopolize. I'm not sure I can accomplish that, but I am bent on working to make it a reality.

 

[Alex - A2 Hosting]

You are the first who is at least starting to get it. Most people don't realize I'm not in it to make money. A little will be okay, but I will be happy if I cover costs with a little extra to boot. I've done the math and with what I have set up if I get enough customers I should be able to do it. Much of my ambition is to make web hosting so affordable for clients is that it will knock the companies out who want to monopolize. I'm not sure I can accomplish that, but I am bent on working to make it a reality.

I did my math, and my business model over a 5 year span will beat most web hosts

Are you after a little side income or out to 'beat most providers'? A little side income, sure. Beating most providers? I can guarantee you that won't happen. Simply your model is not scalable. It has been tried before, a module existed enabling customers to get points the longer they stay which offsets their hosting bill.

so affordable for clients is that it will knock the companies out who want to monopolize

This won't happen. As above, it has been tried before. Cheap and extremely low cost offers. Price sensitive customers would generally jump to the next best deal they can find come renewal and ideally you'd be wanting sticky customers as that is how your business will keep growing. No company will feel any knock from what you're trying to do.

I genuinely wish you the best with your venture. I think the best approach if you are dead set on this approach is to use it to gain your initial customers. Focus on providing an awesome service to those clients and gain reviews/testimonials which you can then use to gain more customers paying much more realistic prices. Your time is worth more than $10-$20/year I'm sure.

 

[easyhostmedia]

gain reviews/testimonials which you can then use to gain more customers paying much more realistic prices.

But we all know that the ratio of positive reviews/testimonials against negative reviews/testimonials is very little.

If you look at most hosting review sites you will see that 95% if not more reviews are negative as people tend to only post bad experiences

 

[ughosting]

Having worked with many a media company I can tell you that people are more than five times more likely to share negatives with their peers.

People are always aware that once they give companies a positive review that they have it "forever" so they will rarely offer one for nothing in return, at which point it becomes a paid-for review which is pretty worthless in terms of honesty.

Which is why review at places like this are so worthwhile, rather than those "Testimonials" on hosts sites or comparison sites.

 

[easyhostmedia]

Having worked with many a media company I can tell you that people are more than five times more likely to share negatives with their peers.

People are always aware that once they give companies a positive review that they have it "forever" so they will rarely offer one for nothing in return, at which point it becomes a paid-for review which is pretty worthless in terms of honesty.

Which is why review at places like this are so worthwhile, rather than those "Testimonials" on hosts sites or comparison sites.

this also go for all those ' top ten' sites, no matter what it is ' top ten hosting providers' 'top ten vacuum cleaners' etc. these are all marketing tools, the more a company pays the site then the higher up the top 10 list they go.

 

[webling]

Are you after a little side income or out to 'beat most providers'? A little side income, sure. Beating most providers? I can guarantee you that won't happen. Simply your model is not scalable. It has been tried before, a module existed enabling customers to get points the longer they stay which offsets their hosting bill.



This won't happen. As above, it has been tried before. Cheap and extremely low cost offers. Price sensitive customers would generally jump to the next best deal they can find come renewal and ideally you'd be wanting sticky customers as that is how your business will keep growing. No company will feel any knock from what you're trying to do.

I genuinely wish you the best with your venture. I think the best approach if you are dead set on this approach is to use it to gain your initial customers. Focus on providing an awesome service to those clients and gain reviews/testimonials which you can then use to gain more customers paying much more realistic prices. Your time is worth more than $10-$20/year I'm sure.

Can other hosts beat free and the owner of the company answers all sales and support requests?

I've already got all that figured out. I have more that is not opened to my customers yet.

I'm developing an affiliate program that will allow clients to have the opportunity to earn their hosting bill.

Do you remember the retort Captain John Paul Jones proclaimed as he engaged in a desperate battle with a British frigate off the northern coast of England during the American Revolution? If not, allow me to remind you, "I have not yet begun to fight!" This is also my thinking.

Do you remember Elvis? After a performance at Nashville’s Grand Ole Opry, Elvis was told by the concert hall manager that he was better off returning to Memphis and driving trucks (his former career).

Madonna ropped out of college, moved to new york, and took a job at Dunkin’ Donuts in Times Square, where she apparently didn’t last a day. What sealed the deal was when she squirted jelly filling all over a customer.

Walt Disney was fired from the Kansas City Star in 1919 because, his editor said, he “lacked imagination and had no good ideas.”

The list goes on.

 

[easyhostmedia]

I'm developing an affiliate program that will allow clients to have the opportunity to earn their hosting bill.

I hate to break bad news to you but these already exist

 

[ughosting]

Just remember that pyramid schemes don't work.
If free hosting worked, paid hosting wouldn't exist.
Cheap hosting is almost the same.

It's not the cost of the service, but the support that ends up being a problem.
There's only one of you, and you need to eat, drink and sleep.

Madonna and Elvis are exceptions.
Elvis wasn't a country singer, but the King of Rock 'n' Roll, and plenty of people have been fired from Dunkin' Donuts, who didn't go on to be an International PopStar.
These are silly arguments.

People here are trying to help you using their years of experience.
Don't be so quick to dismiss them.

For every Google product that we know and love today, many didn't make it, and many got cancelled (Google have got the money, why cancel?. Because an unsuccessful business that produces no revenue is a millstone around the neck of the company)
What Google can do is afford to haemorrhage cash a little longer than you or I to see if it does become successful given time.

Plus, and I'm sure that people will agree with me, at least on this point.
CHEAP HOSTING ATTRACTS BAD ACTORS!
When I offered ridiculously cheap hosting, the people it attracted caused no end of problems.
But miscreants appear to avoid more expensive hosts, probably because they charge more they can keep the costly control panels and supported operating systems and security tooling.

We've been in business since 1999, that's 20 years, so we've seen all the gimmicks.

Still good luck on your business!

 

[Alex - A2 Hosting]

But we all know that the ratio of positive reviews/testimonials against negative reviews/testimonials is very little.

If you look at most hosting review sites you will see that 95% if not more reviews are negative as people tend to only post bad experiences

You need a review strategy to get those positives out .