This post is part of the Professional Independence Project series. People launch their own hosting company all the time. Almost to the extent that I feel embarrassed to say I run a hosting company, because the natural reaction is to think of a re-seller with a handful of customers. The thing I did differently was to find my niche. I know it sounds almost cliche, but hosting companies are a dime a dozen nowadays, and you have to find a niche, no matter how small that might be - it will amplify your success in the future. Related: The Entrepreneur’s Checklist: 7 Things You Need To Start A Business By the time I was 18, I built my first hosting company and had around 3,000 customers paying me for web hosting, re-seller hosting, and dedicated servers. I was simply leasing all the equipment, so my profit margins were low, but man, I worked hard just to keep the company afloat. I was always on the lookout for something new, something that I could integrate inside my hosting service. I found something called FFmpeg hosting. FFMpeg is a code you install on Linux servers, which converts video into .FLV format. This is what allows you to upload videos to a site and watch them. Essentially, after YouTube got big, everybody and their mother wanted to have their own file sharing website. I discovered this new and emerging market and decided to go all or nothing at it. I had it installed on all the servers and I negotiated deals with all the software companies that had video sharing scripts to become a part of my affiliate program. I gave them money for every sale they sent my way and, slowly but surely, I was able to build a steady stream of customers in this 1 niche market. So, really what I’m saying, it doesn't matter what niche you choose, no matter how small it may be. If you can own a bigger piece of that small pie it will give you a competitive advantage over that other guy who caters to five different types of hosting. WPEngine got big because they only catered to WordPress customers and had a very high entry price from when they first launched. It’s better to focus on one or two markets solely instead of doing what everybody else is doing, by offering a general hosting service and advertising affordability with quality - it just isn’t what sells anymore. We must not assume our customer or client is stupid. We shouldn't try to deceive them or up-sell them in a tricky way, as this may increase your overall income but will only lead to decreasing customer loyalty of your brand. So, apart from finding your niche, whether it’s drupal hosting or high-end luxury hosting, it’s more important to focus on a core customer base and own that. If you offer drupal hosting, joomla hosting, WordPress hosting, and so on, you are devaluing your company's worth in the eyes of your customer for each market you go after. Companies try and hide this with landing pages specifically built for certain markets or keywords, but ultimately your brand can only grow to dominate a market if that is all that brand does.
October 01, 2014