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| | The Let's Form a Startup! Network is not currently active and cannot accept new posts | | NEED INVESTORS | Views: 1140 | | Feb 26, 2006 3:33 pm | | NEED INVESTORS | # |
steve kreider | | HI, WE ARE A SMALL HOSTING COMPANY.WE ARE ESTABLISHED FOR 2 YEARS. GROSS REVINUES ARE ROUGHLY 1200.00 MONTHLY. WE CAN EXPAND OUR BUSINESS VERY EASILY WITH THE RIGHT INVESTOR. WE ARE LOOKING FOR SOMEONE THAT CAN PUT UP 300,000.00. WE CAN GUARENTEE 10% PER ANNUAL AND INVESTOR NEEDS TO DO ABSOLUTELY NOTHING!PLEASE EMAIL AT stevekrider@sbcglobal.net Private Reply to steve kreider | | Feb 26, 2006 7:18 pm | | re: NEED INVESTORS | # | 
Robert Johnson | | Steve:
You didn't specify the type of funding you are seeking, but the return of 10% puts you in the category of debt financing.
$1200 monthly revenue isn't going to demonstrate an ability to service a loan of $300,000. Also, with $1200 monthly gross revenue after 2 years - you will need to have a strong plan for a rapid increase in revenue.
All the best,
Robert Johnson
Private Reply to Robert Johnson | | Feb 26, 2006 8:06 pm | | re: re: NEED INVESTORS | # |
steve kreider | | our plan is to use the investment capital to purchase hhosting clients. with that amount of money we could easily purchase over 2500 clients which would generate over15,000 monthly and that is an exremely conservative estimate.
we lease a 42u rack which has the capacity of 21 servers per rack. i build our servers so hard money per server is roughly 1000.00 per server.
the product we sell is virtual and we make 100% gross profit.
it can be very lucritive. our problem is we do not have capital and crummy credit ratings prevent me from getting a business loan
if you are serious about funding we will sign anything you wish. we are honest to a fault.
at present we have 2 servers operating and a third is on the way that is going to be used just for safelistrhosting.
we hardly know what debt financing is.
the reason it has taken 2 years to get to this point is because we rambled around the internet trying different things. finding out what works and what doesn't.
i'm a hardware man and my partner is a web designer. we are not hype artists or fast-talking sales types. we offer a very good product at a fair price.
we have aquired our clients on ebay. this is very costly and inefficiant.
it is far smarter to purchase existing companies/clients from different sources than waste time and tons of money doing the ebay thing.
not only that, ebay has been in a very bad slump as far as webhosting goes so we are branching out into safelist hosting and other things that are associated with that market
Private Reply to steve kreider | | Mar 01, 2006 2:13 pm | | re: re: re: NEED INVESTORS | # | 
Greg Cothran | | I would suggest looking into Secure Hosting for small law firms, Doctors, small banks, etc. Security has become a huge issue lately, and there are not a lot of hosting facilities supporting secure hosting. This can be done simply by providing a VPN between the banks/dr.'s offices/attorney's, and providing a secure offsite storage of their data. Storage is cheap, but providing off-site could provide a very "profitable" solution.
I would also recommend outsourcing your firewalls and installations. If you're interested, I have a friend how has built a very well known established company, who loves helping small companies get started, as long as things are on the up-and-up.
Good luck!
GregPrivate Reply to Greg Cothran | | Mar 01, 2006 4:08 pm | | re: re: re: re: NEED INVESTORS | # | 
>> Barry Caplan - Start Your Future Today | | There is a marketplace for buying customers from hosting companies? I'd be itnerested in learning more about that!
Best,
Barry
- Product Marketing for Digital Entertainment and High Tech Startups
- Are you Investing? Ask about our Investor-side Services!
http://www.ProductManagementDepartment.com : Start Your Future Today!Private Reply to >> Barry Caplan - Start Your Future Today | | Mar 01, 2006 4:16 pm | | re: re: re: re: NEED INVESTORS | # |
steve kreider | | thanks for your input. steve kreider Private Reply to steve kreider | | Mar 01, 2006 5:22 pm | | re: re: re: re: re: NEED INVESTORS | # |
James Griffin Media | | >There is a marketplace for buying customers from hosting
>companies? I'd be itnerested in learning more about that!
>
He was referring to acquiring customers or customer acquisition programs using the funds raised.
---- James
Private Reply to James Griffin Media | | Mar 01, 2006 6:58 pm | | re: re: re: re: re: re: NEED INVESTORS | # |
>> Barry Caplan - Start Your Future Today | | James -
Yes, he did said that.
"our plan is to use the investment capital to purchase hhosting clients. with that amount of money we could easily purchase over 2500 clients which would generate over15,000 monthly and that is an exremely conservative estimate."
I would like to know where one goes to buy web hosting clients, short of acquiring host services.
Anyway, it looks like Steve values each acquired customer at ~ $120, and I wonder how he came by that number too (although my 2 questions are very related).
Also, if he can "buy" the customers at that rate, then they must be paying somewhat less then $10/month for the service now. It looks like he would charge ~ 6/month to get 15K/month revenue, which is mighty mighty low.
I can imagine scenarios where that might make sense, but I am wondering if there is a place where either ISP businesses, or their customers, are bought and sold so I can verify the valuations....
Best,
Barry
- Product Marketing for Digital Entertainment and High Tech Startups
- Are you Investing? Ask about our Investor-side Services!
http://www.ProductManagementDepartment.com : Start Your Future Today!Private Reply to >> Barry Caplan - Start Your Future Today | | Mar 01, 2006 7:19 pm | | re: re: re: re: re: re: re: NEED INVESTORS | # |
steve kreider | | the 120.00 per hosting customer is not representative of what has to transpire. you not only have to have the thousands of customers, you have to have all the hardware/software/racks to support thousands of clients so 120.00 per customer is very misleading.
i buy hosting customers for 15.00 a piece and i get a customer already set-up on my paypal account that is paying 7.00 monthly. i have to pay 300.00 for 20 upfront and he delivers them sporatically. the internet is basically dead. nobody is buying anything. my developer doesn't even get spammed anymore.
so, we are looking for capital to get us a huge customer base which means we can afford to buy more hosting companies. our long term goal is to have a true data center with our own building, but, that is many moons down the road. steve kreider Private Reply to steve kreider | | Mar 01, 2006 7:55 pm | | re: re: re: re: re: re: re: re: NEED INVESTORS | # |
>> Barry Caplan - Start Your Future Today | | Steve -
Thanks for the reply!
Word of advice: If you are lookign for funding, don't post that the area you are doing business in is "basically dead". who wants to invest in that?
And besides, the internet is anything but dead.
I got the 120 figure from dividing the capital you ask for by the number of customers you said you would buy with it:
"WE ARE LOOKING FOR SOMEONE THAT CAN PUT UP 300,000.00"
divided by
"we could easily purchase over 2500 clients"
Not sure I quite get your description - is there someone out there basically "hustling" to get people to sign up to whatever host pays them? I wouldn't be surprisd if that is true, but how would such a source grow from "sporadic" signups to 2500?
Even if they could deliver that many, wouldn't the sudden demand spike cause the price to go up?
And supposing you do acquire the customers at 15/per, what will happen to the other 105/per that you are asking for?
Best,
Barry
- Product Marketing for Digital Entertainment and High Tech Startups
- Are you Investing? Ask about our Investor-side Services!
http://www.ProductManagementDepartment.com : Start Your Future Today!Private Reply to >> Barry Caplan - Start Your Future Today | | Mar 01, 2006 8:42 pm | | re: re: re: re: re: re: re: re: re: NEED INVESTORS | # |
steve kreider | | well, i'm getting aggrivated. all you people have is rather tired silly advise and on the verge of rather unfounded criticisms.........the internet is dead means what says it means....it is dead right now. if you know anything about the internet that could change in a heartbeat.
enough playing the devils advocate.... how about you lending me 300,000.00 big ones and we all will be happy. you will be happy making 10% per year on your investment not having to due a thing for it and i will be happy having more work than i know what to do with and hiring people instead of laying people off Private Reply to steve kreider | | Mar 01, 2006 9:12 pm | | re: re: re: re: re: re: re: NEED INVESTORS | # |
James Griffin Media | | >James -
>
>Yes, he did said that.
I'm not disputing that he said it only that he meant to use 'acquire' instead. In any event, Steve, can you clarify this?
And if you did mean 'acquire' you should change it because as Barry pointed out it's going to hurt you.
That is valid criticism.
---- JamesPrivate Reply to James Griffin Media | | Mar 01, 2006 9:14 pm | | re: re: re: re: re: re: re: re: NEED INVESTORS | # |
James Griffin Media | | >I buy hosting customers for 15.00 a piece and i get a >customer already set-up on my paypal account that is >paying 7.00 monthly.
What do you mean you 'buy' customers? What are the mechanics of this?
Is this the cost of customer acquistion?
Private Reply to James Griffin Media | | Mar 01, 2006 9:17 pm | | re: re: re: re: re: re: re: re: re: NEED INVESTORS | # |
James Griffin Media | | >Word of advice: If you are lookign for funding, don't >post that the area you are doing business in >is "basically dead". who wants to invest in that?
>
Agreed. Steve, I know what you are trying to convey - a lull before the storm, a diamond in the rough, etc.
Some how wordsmith it so that it shows there is much opportunity to be had by those who get in now and set up shop and can profit from the activity after getting out of the doldroms.
Private Reply to James Griffin Media | | Mar 01, 2006 9:20 pm | | re: re: re: re: re: re: re: re: re: re: NEED INVESTORS | # |
James Griffin Media | | >well, i'm getting aggrivated. all you people have is
>rather tired silly advise and on the verge of rather
>unfounded criticisms.........the internet is dead means
>what says it means....it is dead right now. if you know
>anything about the internet that could change in a
>heartbeat.
>enough playing the devils advocate.... how about you
>lending me 300,000.00 big ones and we all will be happy.
>you will be happy making 10% per year on your investment
>not having to due a thing for it and i will be happy
>having more work than i know what to do with and hiring
>people instead of laying people off
Steve,
I'm not sure if you've raised money before but all the critcism we've given you is invaluable. It's not just random thoughts but constructive criticism.
Barry gave you two key points to address - 'buying customers' and 'the internet is dead'.
We might know what you really mean but investors won't. And they don't want to have to think when they read a plan.
That's your job.
Rather than get defensive or take it personally, learn to defend your plan, take criticism for a request for more or different information and improve it.
Think of this as boot camp before you go out and get savaged by the real world.
Private Reply to James Griffin Media | | Mar 01, 2006 9:49 pm | | re: re: re: re: re: re: re: re: re: re: re: NEED INVESTORS | # |
>> Barry Caplan - Start Your Future Today | | James -
Actually I am not so concerned about the term "buy customers" as opposed to "acquire" them. I (correctly it seems) understood him to mean that there is someplace he can buy existing accounts, either individually or by isp acquisition, and then begine to service them himself.
That seems reasonable because it happens in other industries all the time...look at Sprint/Nextel for a large example. Look at Mortgage trading that goes on for a differnt example, often on a smaller scale.
That is why I wondered, as do you, the mechanics of such a marketplace. I hadn't heard of it before, but if Steve is tapped into it, I'd like to know about it. If nothing else,it would make me look at my low cost hosts a lot more closely :)
Also, I feel a certain affinity for it, since during my time at Cobalt, we all but kicked off the low cost ISP market by providing the first cheap, easy to manage web server appliances. We foresaw the day when a market in accounts might occur by 1998 or so.
Steve -
You asked for advice and you got it. It is not like you paid for it. So if you don't think it is worth anything, remember what you paid for it :)
But is not like you shared your books with us either. We just asked for validation of what you are doing, becuse the way you worded it, it appears as though you are going to spend only 15 dollars for every 120 dollars you are loaned.
Wherever you get money from, I can promise you they are going to take a very hard look at the market place and your books, not to mention your management skills. Not having a plan for 90% of the money you ask for is not going to cut it anywhere. That wouldn't be a loan, it would be a gift.
Why don't I invest? Well, so far, I told you I wanted more information in order to evaluate what you are suggesting, and you insulted me.
I am guessing now that there is no great business plan, and so what you propose won'really come about for a while if ever. I looked at your web site though, and if you can deliver what it promises, then you ought be able to grow organically for a while while you firm up that bizplan!
Good luck!
Barry
- Product Marketing for Digital Entertainment and High Tech Startups
- Are you Investing? Ask about our Investor-side Services!
http://www.ProductManagementDepartment.com : Start Your Future Today!Private Reply to >> Barry Caplan - Start Your Future Today | | Mar 01, 2006 10:11 pm | | re: re: re: re: re: re: re: re: re: NEED INVESTORS | # |
steve kreider | | yes it is the cost of aquisition. this is just one of the ways we aquire customers. another way is thru our ebay ads. we run weekly auctions to aquire customers and on a good week we can get 5 new ones. check our auction out:
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=7594003448&rd=1&sspagename=STRK%3AMESE%3AIT&rd=1
ebay has hosting companies for auction also once in a while that are good bargains to be hadbut i cannot purchase because of lack of capital.
the one guy saying i was not in the real world.......i am in the real world!!! i rack my brain trying new ways of aquiring new customers.
it is not like i've just fallen off the turnip truck.
we are just rcovering from a failed venture that depleted my bank account to the tune of 11,000.00. it was a good idea in concept but the mechanics did not work out the way we expected. so you lick your wounds and try, try again.
i'm always up to trying something new. we have other ideas for aquiring customers that i will not bore you with, but aquiring small to medium hosting companies is still the most efficient way of becoming big in a hurry. we have the expertise, all we need is the frickin money...... Private Reply to steve kreider | | Mar 01, 2006 11:01 pm | | re: re: re: re: re: re: re: re: re: re: NEED INVESTORS | # |
James Griffin Media | |
**************
yes it is the cost of aquisition. this is just one of the ways we aquire customers. another way is thru our ebay ads. we run weekly auctions to aquire customers and on a good week we can get 5 new ones. check our auction out:
***************
Okay, thanks for clarifying that. I would suggest putting it into your biz plan using the nonemclature "customer acquistion cost" to prevent any confusion.
This is especially true when dealing with financiers because actually selling customers to each other (e.g, the loan portfolio, credit card debt, etc.) is common fare.
**************
ebay has hosting companies for auction also once in a while that are good bargains to be hadbut i cannot purchase because of lack of capital.
**************
This is true. I've been in that boat before too --- but not with hosting stuff but other facility issues.
I did know a guy that has made a small mint buying up all this equipment and starting his own isp and he has been doing great. He's bought three already.
**************
the one guy saying i was not in the real world.......i am in the real world!!! i rack my brain trying new ways of aquiring new customers.
**************
That's good - don't stop trying to always do something better or re-think it.
**************
it is not like i've just fallen off the turnip truck.
we are just rcovering from a failed venture that depleted my bank account to the tune of 11,000.00. it was a good idea in concept but the mechanics did not work out the way we expected. so you lick your wounds and try, try again.
**************
Well you aren't down until you stop getting up. Couple suggestions turn that into a selling point -- we've been down this road. We've already learned lots of lessons using our own dime and paid for them in full.
Now we are looking to make this a success.
**************
i'm always up to trying something new. we have other ideas for aquiring customers that i will not bore you with, but aquiring small to medium hosting companies is still the most efficient way of becoming big in a hurry. we have the expertise, all we need is the frickin money......
**************
Couple points -- if money is all you need see if you can get money several ways --- getting customers to prepay upfront for 6 months or a year at substantial discount or getting higher service level or bigger account.
And how about getting others to 'loan' you equipment, like a layaway where you pay them a lump sum every six months (with some interest) or pay a little bit every month.
The fact is, to them, their equipment is deprectiating daily as hard drives, servers, cpu's drop in price.
Try to be creative and try to see this not as negative but as constructive criticism. Better to face these questions now and address them so when you met that investor you have everything in order, it's clear and you can pre-empt, address or mitigate any concerns they may have.
Good luck!
JamesPrivate Reply to James Griffin Media | | Mar 01, 2006 11:29 pm | | re: re: re: re: re: re: re: re: re: re: re: NEED INVESTORS | # |
>> Barry Caplan - Start Your Future Today | | > And how about getting others to 'loan' you equipment, like a layaway where you pay them a lump sum every six months (with some interest) or pay a little bit every month.
Why would he need equipment at all? Why not resell others services for a while, with a plan to migrate later?
BTW, this is a really really low margin business and getting more competitive I think.
I agree that custoemrs, esp at the low end, are not savvy enough to move once they are in.
But who are the competitors? Yahoo Domains, godaddy et al giving services away just for keeping the domain registered there, and so on...
Steve - is there an exit strategy here for you, or will you just keep on keepin' on until you and others like you are completely squeezed out by bigger players pricing both above and below you?
Best,
Barry
- Product Marketing for Digital Entertainment and High Tech Startups
- Are you Investing? Ask about our Investor-side Services!
http://www.ProductManagementDepartment.com : Start Your Future Today!Private Reply to >> Barry Caplan - Start Your Future Today | | Mar 02, 2006 12:03 am | | re: re: re: re: re: re: re: re: re: re: re: re: NEED INVESTORS | # |
steve kreider | | i am very surprised you said what you did. firstgodaddy:
i sell domain names cheaper than they do and they have gotten to be such arrogant assholes they are starting to loose their customer base. i used to have 125 domains with them and then they really po me to the point that i searched for something better. now my domains cost me 6.99 a piece. their hosting is nothing to jump up and down about either. they do bait & switch. only thing that keeps them going is the name.
now yahoo does the same thing. they all do it because they can get away with it and the average greenie out there doesn't know the difference. webhosting is what we do. it's how i make my living and i plan on doing it for quite a long time.
i'm in it for the long hall. i get 6.99 to 7.99 monthly for hosting because it is value plus (basically managed hosting) we give the customer more of a chance to make money than the 3.99 a month guys, but, i have a 3.00 a month website too. we also offer cheaper rates for annual subscriptions. a guy can buy a family tree website for 30.00 a year and he needs no special skills to run his site.
he can upload pictures and change the wording and texture of his site at will.
we do many many things but one thing no one can do is get george w out of the whitehouse and most working men hate his stuoid dumbass guts because he screwed up that whole iraq thing. now a very large portion of the population is not nearly as free with their money as they once were.
you have a very negative and fatalistic attitude when it comes to hosting. there is always room for us and we will always get our price one way or the other Private Reply to steve kreider | | Mar 02, 2006 12:14 am | | re: re: re: re: re: re: re: re: re: re: re: re: re: NEED INVESTORS | # |
James Griffin Media | | >am very surprised you said what you did. firstgodaddy:
>i sell domain names cheaper than they do and they have
>gotten to be such arrogant assholes they are starting to
>loose their customer base. i used to have 125 domains
>
Steve,
Don't take this questions personally. Barry posed a very legitimate question any investor would ask. I don't know your space well, but Barry evidently does. So he is helping you along.
Rather than get mad at his question you could respond with:
"GoDaddy's prices are not as good as they seem at first blush, in additiont their service is of xyz quality and our advantage over them is xyz, etc."
I'm not looking to fight with you, just help you out.
JamesPrivate Reply to James Griffin Media | | Mar 02, 2006 12:38 am | | re: re: re: re: re: re: re: re: re: re: re: re: re: NEED INVESTORS | # |
>> Barry Caplan - Start Your Future Today | | > i am very surprised you said what you did. firstgodaddy:
> i sell domain names cheaper than they do and they have gotten to be such arrogant assholes they are starting to loose their customer base
Personally I love godaddy. I sue other services too, ranging from free to ~ 30/year. Godaddy is fine for me.
And is price really the issue with everything? I mean, at 8.95 or less, per year, who really cares? I am sure godaddy is happy not to have to serve the free market - they seem to be after adding services and keeping the price stable.
> i used to have 125 domains with them and then they really po me to the point that i searched for something better
> their hosting is nothing to jump up and down about either.
Personally I run my own servers so I don't really know. It is a complex space, with a wide ariety of price poitns and service points. But like it or not, they are competition, and your business discussins should focus on why your customers will stick with you instead of them, their customers will switch to you, a 3rd party's customers will switch to you instead of them, and a non-customer will choose you over everyone else. That is all that matters really.
> it because they can get away with it and the average greenie out there doesn't know the difference.
yeah, but at the price point you are talking about, you are looking at the average greenie too. We sold a lot of coablt Raqs to "greenies", and from a marketing standpoint, I can tell you that if you address a problem and solve it, then people will go for you. And simple is where it is at.
> we give the customer more of a chance to make money than the 3.99 a month guys, but, i have a 3.00 a month website too. we also offer cheaper rates for annual subscriptions. a guy can buy a family tree website for 30.00 a year and he needs no special skills to run his site.
These are interesting niches, but how do you find the greenie hfamily tree guy? That is a huge hobby btw...I once did some work with Family Tree Maker or whatever it was called inteh mid-90s...I know geneology is huge online...do your web sites meet modern hobbyist standards? If not, then why not? If there were a hosted server for just that, I bet there is a market...
> we do many many things but one thing no one can do is get george w out of the whitehouse and most working men hate his stuoid dumbass guts because he screwed up that whole iraq thing. now a very large portion of the population is not nearly as free with their money as they once were.
Uh, I predict George W will be out in Jan 2009 no matter what happens in the next election - take it to the bank :)
Anyways, not to make it politcal, but I think the overall growth of low cost web hosting, measured by customers served, has continued to grow unabated during the era. Prices are dropping as the field becomes competitive, but don't tell me there is no growth there!
Maybe you could maerket your sites as for the "workingmen who hate bush" group...could be an affinity worth exploring too...your sites are less then a t-shirt per month, and plenty of people will spend 12 bucks ona tshirt that expresses their political affinity! why not give them a site from the screw bush host, and when they are there 6 months or if they pay a year in advance, send them a damn tshirt that you make on demand at cafe press or whatever. Get that stuff rolling, then come back to me with a smile and a thank you when investors ears start to perk up.
Read the previous paragrpah very carefully. Record it and play it next to your pillow whenyou sleep for a month. It has solid advice, despite the price you paid for it.
> you have a very negative and fatalistic attitude when it comes to hosting. there is always room for us and we will always get our price one way or the other
Not true that I am fataliatic. Truth is, the prices will drop, peple without the finances will be squeezed, they will drop out or sell out, and there wil be a rollup. Before the rollup there will be a variety of price points available, after, less so, and then others will step into the vacant price points.
So yes people will be there, but when you ask for investment money, of which you still haven't explained what happens to 90% of it, you have to make a case why it will be *you* as opposed to the next guy. because, even if you are the one worth looking at (maybe you are for all I know).
Best,
Barry
- Product Marketing for Digital Entertainment and High Tech Startups
- Are you Investing? Ask about our Investor-side Services!
http://www.ProductManagementDepartment.com : Start Your Future Today!Private Reply to >> Barry Caplan - Start Your Future Today | | May 23, 2006 11:17 pm | | re: re: re: re: re: re: re: re: re: re: re: re: re: re: NEED INVESTORS | # | 
Reg Charie | | Only one question Steve
Why is your ndshosting.com domain 404?
RegPrivate Reply to Reg Charie | | |
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