business-plan, websiteI started my web hosting business 2 months back and as an introductory offer I offered free trials to various peoples from several forums and networks. They signed up but after few days they either canceled the account or became inactive. What might be the reason? How can I figure out what problem is? Can somebody tell me ways to attract users?
My website is hostingfever.
Hosting is competitive and mature, and switching hosts is a hassle. That’s punishing for a small start-up.
At the moment, you’ll find plenty of hosts targeting niches, investing in features that improve the user experience for specific areas. So search for “Wordpress hosting” or “Rails hosting” and you’ll find hosts that have dug deep into those communities.
So your quest is to find a niche where the major hosts don’t have a great story, where smaller players haven’t pushed far up the value curve, and where you can find specialist forums where target customers gather, and search terms that aren’t commanding sky-high PPC rates. Find out what people want but can’t find, and distil that down to a feasible MVP.
Are there opportunities? Probably. But when every host out there offers deep discounting and reseller plans, you can bet you will have to work hard to find, develop and grow them.
Hosting is a tough business to get into. I don’t think I would trust a host who hasn’t been around for at least a year or two.
Some reasons they might not have continued could be that you didn’t offer particular services, they preferred another dashboard or they did more research and found out you’re relatively new in the industry and wanted an more established provider.
But… Why not ask them? If you are allowed to send them a question or two about your service, maybe along with an offer for another free month they might give you some great feedback!
You could also attract users through adds or good content for specialized hosting niches. I would say WordPress again here but now lots of companies are interested in doing that so you might do something weird like hosting single pages html at a competitive price. Again, these are just ideas because you’ll have to decide what you are good at and what people will pay for. You could also start aiming for very new customers who have less knowledge of the industry and will not care about the difference between you and someone else.
Opening a hosting company now is not a lot different from opening a sandwich shop. You’re competing against Amazon, Rackspace, 1 and 1, godaddy and thousands more. If you had a new sandwich shop you’d be competing against Subway and Quiznos as well as regional players and even local unique stores that have been in business for a long time.
So you have to think about why you got into this business.
Whatever the reasons are(it doesn’t matter what they are, only that you have them), you need to go find the people who will appreciate that. Some differentiators are generally non-starters. If you are for instance, only cheaper than the competition, then you have to recognize that you’re profit margin is so low you’re on the verge of having a rotten job instead of a business(I don’t mean this as fear mongering or negativity, just telling you to be aware of the big picture). Go back and revisit your value proposition until you have something relatively unique, or at least something unique enough to differentiate yourself from the mass market when you pitch your services. Seek out the people who appreciate your differentiators and sell directly to them one on one.
That being said, when you do get customers, ask them why they picked you. Also, try to turn your customers into mavens. Whatever it is that is making them pick you, give them the opportunity to celebrate your virtues. Give them the authority to offer people complementary services.
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