Ian Landsman is Starting From Scratch, March 29, 2007:
ValiantHost Acquired
If you're in the market for a powerful and user friendly Help Desk solution, please take a look at my company's flagship product HelpSpot.
The hosting partner we use for HelpSpot, http://www.valianthost.com/ has just been acquired. While the partnership was informal, it was overall a very good experience and I’m a bit sad to see ValiantHost get absorbed into a larger entity. It sounds like Giorgio, the found of ValiantHost, will be moving on to other opportunities so this leaves the HelpSpot hosting service a bit up in the air. I’m currently trying to get in touch with Server Intellect about the future of that service.
If they choose not to continue it I’ll be on the search for a new partner. I’m also kicking the idea around of offering a solution ourselves. Not normal hosting, not really enough money in that for me, but rather a leased license option. Perhaps a flat $20 per user per month option that includes the hosting. I’m not sure though, even if I partner up with a big hosting provider I’m still worried about sleepless nights tracking down hackers and general badness. I don’t know if any amount of money can properly offset the added stress of offering the hosted solution.
Discussion
> I don’t know if any amount of money can properly offset the added stress of offering the hosted solution.
nope. 
Created by John P. Speno on 03.29.2007 11:21 am
Hi Ian,
Before you go into the hosting market yourself, I strongly suggest you really think about it fully. Although I know you won't be offering a complete hosting solution, only what you need to host HelpSpot, I can tell you from experience that it's not all it's cracked up to be. I would strongly suggest you outsource it.
To give you my story, late last year I had several people come to me looking for some hosting help (where to go, etc.). So I figured I would help them and get at least one box and split the hosting costs between them, making a small profit in the middle for my time. In terms of server resources I was ahead, but in terms of the amount of time it took me I lost a lot (giving me a negative net). What happens is that everyone looks to you for answers to related questions and issues, often that aren't within your scope. And sometimes it's just normal questions because many people know very little about hosting (which I hadn't fully factored in). Yes you can push them off, but I prefer not to, I'm a strong proponent of customer service.
However, after having gone through it for a 3-4 month period, I've now stopped taking any new customers for hosting. I'll keep my current customers for the year because I sold yearly accounts (as well as I promised I would help them get started on their projects), but once the year comes to an end, I'll probably have them go elsewhere for hosting.
The whole thing was through word of mouth and if it wasn't for the time spent, I would have come out ahead. But as you suggested, issues do come up, often not because of you (people do things they shouldn't or just don't know) and therefore you also end up needing some server expertise. I would strongly recommend outsourcing it so that you can keep your core expertise where it's most valued.
Regards,
Steph
Created by Stephane Grenier on 03.29.2007 11:35 am
Ian, finding another hosting partner shouldn't be very difficult.
I would be more concerned as to why Server Intellect/ValiantHost don't mention HelpSpot on their front page. Notice the emphasis placed on their partnership with FogGreez...
Created by Alex on 03.29.2007 11:37 am
Thanks guys.
Alex it's not a concern and is to be expected. Server Intellect and ValiantHost were the 2 companies that offered a special FogBugz hosting service. SI had lots of customer and there were also more FB users with ValiantHost than HelpSpot customers.
The reasons are straight forward. FB is probably at least 4 years older than HelpSpot. Hence it has a much larger user base (not to mention the marketing juggernaut which is JOS) than HelpSpot. I've reached out to them though basically laying it out there that HelpSpot is where FB was 5 years ago and that this is a growth opportunity. We'll see if they think it's worth their while.
Stephane, I agree it will take some serious consideration. If I get a hosting partner quickly I'll probably back burner my own solution. I would never do it as a normal hosting option. As a lease option though it could be interesting. Consider these numbers over 3 years:
Current setup, 5 user installation:
First year: $895
Second year: $245 (support contract)
Third year: $245
A leased setup at $20 per user per month:
First year: $1,200
Second year: $1,200
Third year: $1,200
So the leased option would generate $2,215 more in revenue over a 3 year period. Of course that's not factoring in server costs and assuming $20 is a price point that can be supported. Even a $10 price point though would generate $1,100 more revenue.
All of that though doesn't factor in stress which is probably my largest concern. In any event this wouldn't be something I rush into.
Created by Ian on 03.29.2007 11:47 am
Hi Ian,
Those are indeed some very interesting numbers! If you could outsource the hosting and still manage to get close to those numbers, I would really consider it. If you had to fully manage it, then I'd still be hesitant (that tells you how much I didn't like that business).
But seriously, if you can find someone to manage for a small margin, this is really a good business model. After all these servers will be very limited in scope, so I can't imagine someone will charge you too much to handle this aspect of your business (and you won't need to handle the 24/7 support yourself).
Btw some other benefits on top of the straight revenue you might not have considered is that it will increase the sale price of your company should you ever decide to sell it (investors prefer long term regular cashflow over sales).
If you're selling a 5-user license for $100/month, that seems like an attractive price for me not to have to manage internally my help system.
I wish you all the best and I hope to hear how it goes for you in the future.
Created by Stephane Grenier on 03.29.2007 2:00 pm
Ian,
You're a Smart lad, there's no doubt about that and this hosting hiccup is a headache you don't need right now. My thoughts, you're right to want to stay away from the full responsibility of a hosting service.
I'd like to think that you're spending your energy, time and focus on the userscape products and not be distracted with other things. But that's just my thoughts, I'm sure you will figure out a way that works best for you. Maybe this journey will lead you to a better place?
Good luck Ian! We're all watching, if not commenting.
Created by Duncan Cunningham on 03.29.2007 2:28 pm
Well that's my big fear as well Duncan. I didn't get into this business to be a sysadmin (no offense to those who are). HelpSpot is doing very well as is so there's really no financial reason why this would "have" to be done. My inclination for now is to find a new hosting partner who can provide the same type of service as ValiantHost.
From there as UserScape grows and if there's money for a dedicated person to manage this type of initiative then that may be a more interesting and safer scenario.
Created by Ian on 03.29.2007 2:35 pm
Hi Ian,
you use our php framework, you use our CMS/blog tool, you might find our hosting to your liking as well 
I sent you a private email. I'd love to speak with you about this.
Created by Leslie Camacho on 03.29.2007 4:50 pm
I would say this... if you have lots of sysadmin experience go for it. I've been providing my own hosting and managing my own servers for 6 years now. I haven't had any problems similar to Stephane. What was a nightmare was when I used to host email. Now that Gmail offers business email for free, I send people there, and there's very little work involved in maintaining a web server/database server as long as you understand the fundamentals of load testing, failovers, etc.
You're definitely going to want to sign up for a service that monitors your uptime though, so YOU are the first person to know if the server or website is down.
Created by Phil on 03.31.2007 5:43 pm