How many web hosting businesses/companies fail in the first year?

bubblehost

bubblehost

Member
This is my first post in this forum.
Question: how many web hosting businesses fail in the first 1-2 years?
By fail, I mean have no customers and go out of money.
Because the web hosting market is in low demand, everyone who does need a website just goes to the big guys, which is why you need something unique in order to gain clients and earn money.
But for the people who don't have ANYTHING unique, how do they have so many clients? Is it that they entered the market at the right time?
 
There's not much unique things you can offer.

People care about a near perfect support system that is done in a timely matter, since most have no patience.
And the price.

You can start offering discounts, but don't invest too much. Try to not spend too much on infrastructure that makes you outlast the first 3 years. Those are the hardest.
 
Beginner users typically turn to large providers, while those with experience in the field understand that obtaining services such as support from these providers can be a challenge. A successful provider needs time to prove itself and it will happen over time.
 
bubblehost said:
I see. So even if you start a web hosting business in 2030, and keep going in 2050, you will eventually be one of the 'big guys' that everyone goes with?
Click to expand...
Probably not one of the big guys, but you'll likely be making a comfortable living.
 
Artashes said:
Probably not one of the big guys, but you'll likely be making a comfortable living.
Click to expand...
Fair enough.
Thanks for sharing your information, this helps me a lot. I only started web hosting this year. Something I have noticed is that when you learn something new, you realise how much you still don't know.
 
Any time can be the right time to start your hosting company. You can utilize paid advertising to acquire customers. Forums are your friends.

You need to drive traffic to your new hosting company. You should have patience and build trust in your brand. You cannot get success in just one year with new brand name unless you have huge budget for advertisement.
 
I would venture a guess that the majority of people who start a web hosting company fail in the first year or sell within the first year. It's not as easy of a job as people think.

The entry price point in web hosting reselling is very low. You could, in theory, get away with it for less than $20/month. Of course, that's not setting up LLCs, payment processors, etc., but you get the idea. You could set up a PayPal account, set up a generic reseller, and perform actions manually. You wouldn't even need WHMCS or another automated platform.

Again, since entry into the web business is so low, many people give it a shot. Some will have a handful of clients after a year, then just turn around and sell the business.
 
bigredseo said:
I would venture a guess that the majority of people who start a web hosting company fail in the first year or sell within the first year. It's not as easy of a job as people think.

The entry price point in web hosting reselling is very low. You could, in theory, get away with it for less than $20/month. Of course, that's not setting up LLCs, payment processors, etc., but you get the idea. You could set up a PayPal account, set up a generic reseller, and perform actions manually. You wouldn't even need WHMCS or another automated platform.

Again, since entry into the web business is so low, many people give it a shot. Some will have a handful of clients after a year, then just turn around and sell the business.
Click to expand...
Yeah, I understand that it isn't a 'get rich quick' plan. I already did my research and know about this before I started web hosting in the first place.
 
From my professional opinion, the web hosting company failed in the first year, many of them start without knowing what cPanel hosting is, WHMCS, SEO, ads, these are also important factors when providing support, not knowing what to respond or errors or a given bug. the circulation that some are not aware of.
 
A lot will fail because they will start buy getting a full high spec and expensive VPS/dedicated server but they have no client base and no reputation. so could be spending a small fortune every month without any revenue, so when they do get clients they have no money left to operate the business.

People should start small and build up a strong clientbase and reputation before going for vps/dedicated then they will have more chance to survive
 
netcrohosting said:
many of them start without knowing what cPanel hosting is, WHMCS, SEO, ads, these are also important factors when providing support, not knowing what to respond or errors or a given bug. the circulation that some are not aware of.
Click to expand...
Really?
I always try to learn as much as possible by experimenting with things and playing around with things such as cPanel, Ubuntu, WHMCS, SEO, etcetera. In this case it's understandable why they fail then.
Thanks for your help.
 
bubblehost said:
Something I have noticed is that when you learn something new, you realise how much you still don't know.
Click to expand...

Welcome to the IT industry as a whole where the imposter syndrome is real. You hold so much knowledge and there's always the need for more.

I can only echo what has already been mentioned here. One of the top reasons is that people spend far too much at the beginning, this isn't such a bad thing but combine it with slow growth of new customers then people end up throwing money away without many customers.

I think most of this is due to the reluctance using services from a new web host since a lot of don't last long and so many 'summer hosts' every year. I can't think of another industry where there's a influx of new people providing services that last a couple of months.

The only advice I can give is to start small and get your name out there, get it branded, make it so people are seeing your name often. It's hard work, there are free and paid ways to do this but a year down the line and people are still seeing your name, and remembering you.
 
We believe that the only 'unique' part of hosting is how a business conducts itself. You can make a website and sell a product, but the support behind said product is what makes your business unique.

There is a large market out there and many hosting businesses fail to provide the support for their products - the company that provides the best support - has all the customers. If you are providing excellent support, then your customers will do all the marketing for you.

A webhosting business best asset is the support teams that is behind the scenes.
 
Many web hosting businesses fail in their first year. It is a highly competitive industry with a lack of technical expertise, including poor marketing, customer support challenges, scalability issues, security breaches, and failure to adapt to changes in the industry. These types of factors create difficulties for new companies. If a person handles these key areas in their hosting service business, they can run their organization successfully.:)
 
SharedGrid said:
I think most of this is due to the reluctance using services from a new web host since a lot of don't last long and so many 'summer hosts' every year. I can't think of another industry where there's a influx of new people providing services that last a couple of months.
Click to expand...
Yes always the same in the summer holidays. school kids break up for 6 weeks, so but an unlimited everything reseller plan for £2 off ebay and call themselves webhosts (without any knowledge), so they list cheap plans on ebay and get customers who just look at price, they when they go back to school they just close down laving their customers without sites or files and these people come to us panicking expecting us to get their files back and websites up and running.
 
You need to apply different techniques to make your brand stand out from others. It's not one day task, it can take years. But slow and strong branding is better than no branding at all.

Another thing is that, don't be settle for less. Invest your 90% of time on sales & marketing, you can hire someone for customer support. But this is vital.

Don't rely on a single marketing strategy too much. It could kill your business overnight if that channel goes odd. Try different ideas, techniques and rock with your brand.

Best of luck.
 
bubblehost said:
This is my first post in this forum.
Question: how many web hosting businesses fail in the first 1-2 years?
By fail, I mean have no customers and go out of money.
Because the web hosting market is in low demand, everyone who does need a website just goes to the big guys, which is why you need something unique in order to gain clients and earn money.
But for the people who don't have ANYTHING unique, how do they have so many clients? Is it that they entered the market at the right time?
Click to expand...

It's said that some 75% of all hosting businesses fail within the first 12 months.

Truth is, it's a hard market: values years of staying in business equaling them to trust because no one wants to stay without a website, it's very shielded by licensing for multiple things (cPanel for individuals, Plesk for some companies, then you've got LiteSpeed for databases, CloudLinux for cgroups, JetBackup for backups, Softaculous for program scripts...) which cost a substantial amount of money to run independently, and you are not really acquiring many new entrants, you're basically taking from someone else mostly, by now.

You really need something different to thrive, even price won't just cut it...
 
You must log in or register to reply here.

Supporters

Back
Top