…to change the image of cheap internet hosting. I can’t see it happening. What I would love to do would be to run a small business supplying cheap webhosting for websites and IRC and Shoutcast and Teamspeak and VPSs and Dedicated servers and so on and so forth, meanwhile providing quality 24 hour phone and email support for a low monthly fee. I’d like to do that. I think that is what the internet would like. But it isn’t going to happen any time soon. Why? Because I don’t have the upfront money to pay for the first server, which itself would probably only be able to supply websites for example. And even if I did, I would probably not be able to afford long-term payments if only one or two people bought accounts – not much motivation to have people calling me at 3 in the morning because their website is running slow.
The sad truth is that small internet businesses are not very profitable. In order to make any money, you need a minimum amount of resources and get a large number of customers using them in order to pay for a) the resources being used already, and b) more resources.
I was crunching numbers a few months ago with the prospect of starting a VPS company, but in order to get going, I was needing around $240 a month for the server just to get it up and running, and then I needed 24 people paying $10 a month before it would break even. With that kind of package, I’d only have another 6 packages available on that server before I’d need a second one, and then I’m back to finding $180 a month until that one reaches a break-even point. Once I had 6 servers running, there would be enough profit from 6 full servers to fund a 7th without anything coming out of my own pocket, by which point I would be serving around 180 customers. The seventh server is what would be the turning point in the business. And somewhere in all of this I’d need to have found 180 people that want VPSs with the crappy support that I’d be able to provide on my own, meaning I’d probably need to pay for advertising of some description, and possibly provide some web-designing services of some kind. Keeping in mind also, that none of those numbers were taking taxes or any other mandatory expenses into consideration, so it would probably be the 8th server that was making money. Around the 10th server (Read: 300 customers) I’d be able to afford to visit a mobile communications store and lease unto myself a cell phone and a wireless data-card to provide support anywhere. I’d also be able to lease a VoIP account for the business and accept incoming phone calls for support. I would have undoubtedly branched out by this point, and be providing other services using similar hardware such as website hosting, but hosting more people per-server at a lower cost per-customer. I’d be reselling dedicated servers, probably looking at the viability of buying my own hardware and co-locating it.
And that is where it gets depressing. Maybe I need to just do it? Maybe I need to save the money and put a real plan together, put the time into it and make it work. Maybe I need to find a business partner who I can trust. Maybe I need to give it up already. I know I need to study the business side of it to find out how much that would cost before going further with the viability of the pure technical numbers. I know I need to study further, and make decisions regarding placing multiple service types on the same servers, such as ShoutCast hosting alongside TeamSpeak hosting – probably not a good plan. The same idea applies to mixing VPS plans on the same hardware, as it isn’t entirely fair to cram whatever will fit on a server on whatever is available at the time, at the same time I can’t afford to run 3 servers with 3 plans until they’re paying for themselves.
So I shall return to my silent pondering of greatness that will likely not come. I will continue to come up with ideas that may never see fruition. And I will proceed to consider possibilities to make money as well as a name for myself in the internet community.