In some respects it is easy for many small to medium sized firms in this space to compete. It is a mass market. It is big. There are a lot of buyers of your services. Like me you have seen dozens if not hundreds of your competitors. These competitors have great web sites, stats from Level 3 or your favorite co-lo facility. Who does not have 24/7/365 security, standby power, flashing lights and 99.998% uptime or whatever guarantee? You do, your competition does, the reseller and the reseller’s reseller do. The power is in the presentation or as Zig Ziglar would say “You sell the sizzle not the steak”. The Internet in a sense starts off with a level playing field.
The first M – Marketing —- I often hear that “We are great at SEO, our ranking is high.” Have you seen how many SEO and Social Networking marketers there are on Twitter, Facebook et al? What good is marketing if you can’t close the sale? It does not necessarily take the highest page ranking or lowest price to grow your business. The question becomes how effective your sales people are. Unless you are dealing in the commodity end where you only deal with web based sales, where pricing and SEO is a major function, your sales people are paramount.
If you play in non-commodity higher end dedicated, managed servers, cutting edge cloud, SAS services you probably need real sales people. You are attending trade shows, pressing the flesh and making quotes, not taking orders. At Parallels in Miami and at WebHostingDay this week there were a lot of name brand firms and want to be name brands, and a lot of sales people. You need closers.
The second M – Money. Here is the rub. You need money. After all on the surface you start with that level playing field, you can check out Go Daddy’s’ key words, there are a bunch of them. On Google it takes $3.25 to get top page position for domain hosting, $7.75 for shared, $12 for dedicated, $15 for managed. With all that competition, if you have the skills you can build a low million$ business using the SEO and Sizzle method. It’s just hard to get beyond that point without funding and aggressive cash marketing plan and closers
Besides all the cloud frenzy, and I like frenzy, there are tons of opportunity in the high end dedicated and managed sector, or should you call it your cloud? See Ziglar. The problem is the cap-ex. Once you have your sales pipe in place, those great closers in place, you need to configure and have those servers in place. That takes cash, a really high credit card limit or an equipment lease agreement line that does not eat your lunch. I like the second M, I like cash.
The second M, Money is also needed to take that rapid leap, acquisition.
The reason there are Go Daddy’s – Rackspace’s are these M&M’s. These are the two M’s that are missing in most organizations. So focus on your first M, Marketing first. For most firms this M is the cheapest to implement. For the other “M” Money I recently picked up a business card from Russia Partners Management, LLC they are one of Parallels backers. If you have M&M’s take full advantage of them.
Part II of the M&M’s that focuses on how to strategically prepare your company for sale will be released next week…. it deals with the color spectrum.
Later Tom – Or Meet me in NYC at the WHIR Networking Event Thurs March 25th.
More about Tom: NCC – the Hosting Business Broker Twitter: TomNCC and NCC WebHostBusiness
