This is hard to write, but I feel as if an honest question deserves an honest answer. You don't have enough money or experience to start this company. You need a much better design for your website and your purchasing decisions to date lack business accumen. Spending $2k on SSDs is not a wise choice, and throwing more money after them is not wise either. You underestimate the amount of money it will take to launch this by at least one order of magnitude, if not two, and you overestimate the willingness of investors to invest in pre-traction startups.

My advice: Take $300 from the $3k and try to make $350 with it. If you fail, try again until you either have $0k left, or a business that makes some sort of bare minimum profit.

If that doesn't sound fun to you, then get a job at a startup and learn as much as you can while you are there.

Sorry for the hard words, I was in your position at some point in my late teens, and I wish someone had told me the realities.

(The good side is that you will eventually make it. Just keep working hard.)

Best of luck.

I recently blew a 6 figure inheritance on a startup which failed due to medical problems http://www.techcofounder.com/ads/view_ad.php?id=769

As a customer, that would concern me, especially when it's a one man show. As a business owner, I wouldn't touch it with a 10 foot pole. You would be more of a liability than anything.

If I were in his position, I'd prove the concept by reselling DigitalOcean. They do low cost SSD VPS. That way it won't cost 5k just to see it flop (or not)

Apparently based on people I've talked to who are familiar with the tech startup scene, there aren't any dedicated server providers specifically targeting the tech startup market

You mean B2B? There are thousands of them. I am having trouble thinking of a webhost that doesn't target the tech startup market. Geocities or Angelfire maybe?

In fact, MediaTemple gives free hosting to a lot of tech startups in exchange for their logo appearing in the footer.

I don't know what to say really. There seems to be a huge disconnect from reality. Probably not anymore than most teenagers, if that makes you feel better.

This says it all really.

As for how to spend that $3k? I'd say work on finding a way to articulate your value proposition well enough so that you can convert customers at a high enough rate compared to what your competitors are making.

Don't try to service these customers at first and just hand whomever makes it through over to another party (taking a few percent in reseller fees.)

It seems like you have a small nugget of a value proposition hidden in your site, which seems to be people who are looking for truly high-performance bare metal servers to rent on demand.

I'm pretty sure that for that specific niche a few people/companies can make decent money by having the best combination of SEO/SEM and well converting marketing copy.

If you want to get this company off the ground you'll have to become one of those few people and consistently beat the few other players bound to be trying to dominate this market.

Testing all this costs almost nothing apart from a few dollars here and there to help test your new design/copy a bit faster.

That is what you'd need to make a successful business out of this. If that doesn't sound like fun to you you're probably interested in something else right now and perhaps you should focus your activities around being able to work on the things that interest you...

Pretend you invested $3k in servers and SSDs. Add these services to your site, and try to find your first customer. The bad news, you'll never find them. The good news, it didn't cost you a penny.

Agree. Put another way the saying "you have to walk before you can run" (or is it "putting the cart before the horse".)

While it is fine to ask questions you also have to narrow down the questions that you ask and show that you are willing to put the time in (as others have) to figure it all out using already available information.

I'm reminded of many years ago when a friend wanted me to simply tell him how to start a similar business to the one I was successful at (non tech business). I was willing to fill in gaps in his knowledge of course but I wasn't willing to give him a play by play of things that took me years and years of trial and error to learn or to be his "help desk".

You're also trying a oft-repeated dream in starting a web hosting company. It's the same story since the 90's, and that ship has already sailed when costs plummeted and there went your margins.

Worse, this time around you're caught in a position where everyone is making expensive investments into SSD infrastructure by factors of millions.

Your rack of few SSD raid arrays is not in anyway, shape, or form on the same level of competing with anyone else offering the same product at your intended price range.

Sell all your hardware and recoup your money and try something else.

Or if you wish to persist...

1. Sell all your hardware to recoup costs.

2. Sign a leasing contract with an established hosting company.

3. Buy a control panel software for $500.

4. Hire a designer for $1500 to create logo, webpage, email templates, ads, and marketing material.

5. Spend everything else on targeted Facebook ads.

Good luck.

Do not hire a designer for $1,500. It sounds like you don't have much money to get started, and you're going to need every penny in reserve for problems. You need to be doing those things yourself, despite the time and effort it will take.

Don't spend a single dime on Facebook ads, or any other ads. Set up an account on WebhostingTalk.com and spend hours there every day, with your information in the footer of every post you make. Also consider posting to the deals section to get your first customers, to the extent you can afford to. By virtualizing your dedicated host, you'll have a guaranteed margin, erode that to provide deals.

Front as little money as absolutely necessary. Do not set up a new box with your provider until you get an order from a customer.

Once you have enough customers and are making a little money, you can begin messing around with custom hardware hosted in whatever situation you think is ideal.

You're not a real web hosting company, and you can't afford to be for a while yet. You're a customer service layer that rides on another hosting company, you differentiate yourself by being extremely hands on. Then when the time is right, you can try fronting the capital needed to begin your own host.

The website you linked to is, frankly, not slick enough or trendy enough to attract the HN crowd to rent your servers. It doesn't clearly define why I should pick you over DigitalOcean, Linode or even Amazon. I can understand that you're probably focused on 'shipping' by building out the platform, but I think you should work on validating the idea as well. I would use whatever funding you have to commission a proper landing page that explains a few key points and captures email addresses. Even better, go out and talk to people and explain why your project is new, exciting and better. See if they also think it's new, exciting and better. If not, iterate and repeat.

Basically, rather than stressing about whether to buy MLC or SLC, collect customers who are concerned about performance first. Then find out what they're looking for: is it really SSDs, or is it a better core/memory ratio, or it reliable networking (that last one is highly likely, I've never seen anyone who's happy with their VPS networking). The best part about this plan it, besides paying for the website (which shouldn't be more than 500 bucks), you don't need to sink any more money in right now. Just time.

Ask HN: What workloads would this VPS config be good for? https://news.ycombinator.com/item?id=5592790

Ask HN: How do you keep your servers/sites safe from hackers? https://news.ycombinator.com/item?id=5739713

Ask HN: Would any web devs like to co-found this startup with me? https://news.ycombinator.com/item?id=5764168

Ask HN: What are the specs on the dedicated servers/VPS' you rent for dev work? https://news.ycombinator.com/item?id=5772439

Ask HN: Help me price my product. What's the most you would pay for this? https://news.ycombinator.com/item?id=5776554

If you don't have answers to these questions I strongly recommend not spending anything until you do. You're risking burning through all your capital before you have an idea of what you're marketing or who you're marketing to.

Also, you're drastically underestimating the costs and complexities of starting a hosting company. You could easily burn through thousands of dollars before you make anything.

    Apparently based on people I've talked to who are familiar with the 
    tech startup scene, there aren't ant dedicated server providers specifically 
    targeting the tech startup market, and if I were to enter the field,
    I'd be the only player there

You couldn't even give me PAY me $1000/month to use your hosting, that's how sketchy it looks. No joke.

I'd spend the money on a design and a marketer - you need to get the message right.

This isn't a viable business.

From this and your previous posts it is clear that you don't have the knowledge required to run a hosting company, you don't have a target market, and you don't nearly enough money. You're off by at least a factor of 10, if not closer to 50. No-one wants to rent a server from a one-man-and-a-machine company.

Please read over the various comments from your past submissions and be honest about what you read before you continue.

You will save time on managing server, money on bad hardware etc..

2. Make good website. Really good, current looks like crap.

3. You can use WHMCS for managing billing and servers, VPS, etc.. it will be enough in the beginning. Monthly license only cost 18$/month, and lifetime 350$

isp config: http://www.ispconfig.org/

gnucash for accounting: http://gnucash.org/

sugar CRM: http://www.sugarcrm.com/

Icinga for monitoring: https://www.icinga.org/

Pick your fonts and colors: http://colorschemedesigner.com/

and a logo: http://www.logogenerator.com/logo_draft.php

This is all so bad it's like a parody of the companies we've all seen or heard about.

That, or it's the most well-planned troll I've seen in a long time.

it seems like you are a do-er, which is fantastic, as most people have the other problem of having ideas, and not acting on them.

but you seem to be approaching this w/o sufficient knowledge/experience in business development aka, "theory stuffs".

I highly recommend http://www.mixergy.com to get a well rounded opinions, and anecdotes on startups to get a better feel for the types of things you need to be aware of before/after launching.

keep at it, best of luck.

p.s) http://www.bothsidesofthetable.com/

http://www.gabrielweinberg.com/blog/

http://paulgraham.com/articles.html

also fantastic places to checkout

You may have customers who are evaluating your service because you offer SSD RAIDs. They know what the alternatives cost. They know what it costs to build it themselves. You've just told them exactly how little money your business has.

You're letting it show that you're just some guy with some servers in a colocation somewhere, hoping to rent them out. Why should any customer choose you, instead of the competition?

http://www.sparkasse.de

Thanks for bringing it to my attention. I'll contact Crowdspring & let them know- maybe I can get my $4,000 back.

We made up our first logo, 10 minutes in Photoshop—it was as ugly as sin but it didn't matter.

We lived with a VM because there was going to be no load on our servers until we had traffic.

The really expensive bit was the time me and my co-founder put in. To a degree, if you don't factor lifestyle (and you should), we're still recouping that.

And you cannot beat run of the mill Go Daddies and Hostgators and Bluehosts with their prices. UNLESS you offer something really unique, value-added that others does not have.

Lots of people have weighed in on this thread with some wonderful advice. I encourage you to heed all of the cautions!

I have little new to add, but I want to give you some compliments. Most people dream big dreams and never do anything to reach them. You, on the other hand, dreamed a big dream and are clearly working your tail off to achieve it. That alone is admirable. Add in the fact that you either saved up some money to invest in your business, or you've found an investor, and you've clearly got a whole lot of good going on.

This might not be the right startup for you, but I respect and admire your drive. Keep at it, mate - you have an immense amount of potential and I'll be cheering for you.

Are you a good programmer, but a terrible designer or something?

You're probably better off running freelance/I.T Service business then attempting this. It won't require any massive capital requirements.

Regarding the $1,017 for incorporation via LLC. You can incorporate for a lot less than that. See: Legalzoom.com

Keep in mind that will immediately add overhead costs and a little time consumption to maintaining the company / keeping it in good legal standing. It might be worth doing because of the bit of a liability shield you will acquire with it. Personally, I'd go as far as possible without spending that money (maybe at least until you have a few customers).

my suggestion is to set up yourself a prgmr-like website, do the administration yourself (by hand), and spend a few hundred dollars trying to get some traffic and signups. if that starts to work out then take it from there. realize that more SSDs aren't going to generate any money; signups will.

a new website would be nice, but you don't have the money for one, and it's not clear it's worth trying to get one at this point. the pure ASCII look could actually instill some sort of confidence that your current website does not.

good luck!

If it makes you happy and energized after, it might be even more helpful than the infusion of cash...

Zaman

Come on I'm all for people doing their ideas but this is a joke. Read his other comments/posts before down voting me whoever did, guy has no clue what he is doing. Pretty much its like picking a random person on the street and then picking a random idea for them to do.