When good hosts go out of business

[JamesCWilson]

Anyone who has been on the internet long enough probably has some hosts which they remember pretty fondly, but they went out of business for whatever reason. What do you remember these hosts by, and was it ever revealed what lead to them going out of business?

Some of the most common factors seems to be: lack of customers, prices are too low, and any number of other things.

 

[handsonhosting]

I remember a few that have failed over the years that have failed due to any number of reasons. Partners splitting is a big one that happens from time to time. One that we don't think of often is embezzlement. In some cases just the rumors of issues brewing were enough to send customers fleeing and leave a company holding hardware that they couldn't do anything with.

You then have the BAD BAD cases of companies folding up overnight with hundreds of thousands of customers. Featureprice was one such company I remember that literally left customers stranded, holding their domain names so they weren't able to transfer to new companies and closing their doors overnight.

Many issues can actually be attributed to management, squandering of funds and lack of discipline on behalf of staff and owners. Even giants such as Adelphia Cable ran into these similar issues in recent years!

 

[romes]

A lot of reasons can attribute to a good hosts going out of business. Lack of clients, not enough funds, or just not having the time to keep the business up. Also, as handsonhosting said "Many issues can actually be attributed to management, squandering of funds and lack of discipline on behalf of staff and owners."

 

[webfreak08]

I remember the saga surrounding RegisterFly's demise. It had major problems before folding.

 

[cyberworldhost]

I remember a few that have failed over the years that have failed due to any number of reasons. Partners splitting is a big one that happens from time to time. One that we don't think of often is embezzlement. In some cases just the rumors of issues brewing were enough to send customers fleeing and leave a company holding hardware that they couldn't do anything with.

You then have the BAD BAD cases of companies folding up overnight with hundreds of thousands of customers. Featureprice was one such company I remember that literally left customers stranded, holding their domain names so they weren't able to transfer to new companies and closing their doors overnight.

Many issues can actually be attributed to management, squandering of funds and lack of discipline on behalf of staff and owners. Even giants such as Adelphia Cable ran into these similar issues in recent years!

wow I am happy I don't have partners. Thank god I didn't come up with my name and ideas with a friend :thumbup:

 

[Wajdan]

The partnership in the web hosting business is big issue. I remember, one of my friend's company went down due their personal issues with each other. We assume, only one owner can do a better business than partnership.

Best Regards

 

[chatterbox]

The problem exists in web hosting just as many other areas of online business - people think because it's online that they don't need to have any business knowledge, experience or plan. Somehow many think money will just fall from the sky when they enter the internet arena. It's too easy to enter most markets online and many treat it as a hobby instead of a real business.

 

[handsonhosting]

Not to deter anyone from having business partners from the above statements made by me, but having a partner CAN be of great help. Over the years, in various businesses, I've had multiple partners and investors, and NEVER had an issue. Partners, and investors (silent and with voices) can be a vital part to starting an operation, and even more so once the operation is in full swing. I know personally, my businesses (especially the web hosting business) would not have succeeded without the help of my main business partner, and then the quality staff we've been fortunate to hire and bring on as part of our team.

Again, partners can take you down, but they can also be what keeps the company together! Checks and balances - it's required in ANY business.

 

[Blue]

I've had several partners in various businesses.
The key is to choose wisely.
I always choose a partner who has strengths where my weaknesses are. I rarely take on a partner that I am close to. You lose objectivity when you team up with close friends, generally speaking.

 

[siforek]

The downfall of RegisterFly sent quite a bit of customers my way, likely it was the same for everyone..

As far as partners.. I tried establishing a partnership earlier this year. It all went great at first, but when it came to crucial issues just before launch he lacked planning skills, and just wasted my time.

I'm not against partnerships, in fact I'd absolutely love to have a "good" partner. IMO a partner needs to be on the same page as you and as said before, strengths you don't, vise verse.. No family or friends. This can be hard as trust is an issue as much with people you've known all your life as with complete strangers.

 

[SenseiSteve]

What I've seen more often are management types running with the money, partners breaking up or plain and simple mismanagement.

 

[JamesCWilson]

Whenever going into business with anyone, you always want to make sure that you can trust them not to screw you over, or making bad decisions on impulse. Even good people can get angry or frustrated, but you need to be able to control yourself, and think things through.

 

[ldcdc]

From what I've seen, hosts tend to be quite resilient once they go over a certain size, even when things go terribly wrong. There's a sort of inertia that keeps things moving. Perhaps the recurrent income is "to blame".

Once key individuals end up in jail (e.g. the owner or one of the partners), you can expect serious trouble ahead.

No family or friends.

Yet some of the great businesses out there were and are family owned. (not talking about hosting businesses, but businesses in general)

 

[handsonhosting]

Most of my investors over the years have been friends. People who believe in "ME" more than the product necessarily.

If you have a business plan laid out, hold regular stockholder meetings and partner meetings, discuss the situations that are coming up before they become issues, you can USUALLY avoid failure. As Dan stated, some of the strongest businesses have been family owned and operated. I guess it all really just depends on trust and keeping things ABOVE BOARD. The moment there's something sneaky, things go down badly.

 

[SenseiSteve]

An example - two business acquaintances got married - we became the best of friends - went out together all the time. They landed a few contracts and their business grew large enough to take on an entire department from one of their clients. They added family to help manage the business. Over two years they grew large enough to build their own building. Then the husband cheated on his wife (the owners). They got divorced - she wouldn't sell her half of the business and the whole thing went under. She moved to Boston and the last time I saw him, he was delivering packages for a courier service. This stuff happens all the time. It's tragic.

 

[hostgoza]

honestly that would not be happen, with good financial control,

and service/ management!

 

[SenseiSteve]

Unfortunately, not all hosts are blessed with good financial, service and management control. This is no different than any other industry - there is fallout.

 

[daemon2008]

There is fierce competition in this industry. Any kind of wrong decision lead to out.

 

[SS-Maddy]

RegisterFly is the one incident I remember. Not quite sure on what went wrong. But ICANN interfered and some competitors gained.

As a support team, it's so nice to have a feeling to see a host grow and hurts when they run out of business, especially when that happens just because they didn't want to listen our advice. But those who tasted the success of hosting, would come back for sure, even if they runs out, as long as they have some $$$ to invest,

 

[romes]

Yep, having business partners is a good thing if you choose your partners wisely. If you just choose the first person to answer your ad or what ever your gunna fail (Unless this person has millions )