So you want to be an ISP?
Fed up with your local Internet Service Provider? They won't answer the phone? You could do this better than they could?
This is your opportunity to get in on a burgeoning entrepreneurial opportunity, make some good money, and have your very own T1 to the Internet!
NOT! Starting an ISP is as difficult as any other entrepreneurial endeavor. It means 18-20 hour days, no time off, cash flow problems, irate customers, and hair raising network outages. It means taking yourself out of the market for the *real* opportunities on the Internet as you struggle to succeed in the Internet access business.
This is the down side of the ISP business. I have been through it. There *is* an upside. I have helped several ISPs see their way to profitability. This article shares some of the valuable knowledge I have garnered from two years of this business.
There are some reasons to get into the business that represent real market opportunities. Here are some pointers that will help identify the opportunity, avoid mistakes and get your ISP business off to a profitable start.
When to start an ISP?
When there are *no* ISPs serving your local calling area.
When the only way to get on the Internet is through AOL, CompuServe, or a long distance call. This is a true market opportunity. You are probably in an outlying area that will not see a lot of competitive pressures until after you are established.
When existing ISPs in your market are offering terrible service because they did not plan for the tremendous growth.
In this case you must be sure that the competition does not have the ability to get more capital quickly to respond to your entry into the market.
When you have *lots* of capital.
With sufficient capital you can establish an ISP in *any* market and clean up. For what is "sufficient" capital see my upcoming article "The Scaled Business Model for an ISP, $100K, $1M, and $10M Investment Strategies."
How to get started?
First, there are several resources to take advantage of. Typically before launching a new business you should "sleep" on it for several months while you review your plans with family, friends, experts. Unfortunatley the Internet moves way to fast. You have to act extremely quickly. Here are some steps to take to get educated fast:
Get David Dennis' Internet FAQ at http://www.amazing.com. This is a repository of information from the Inet-Access mailist.
Subscribe to inet-access by emailing inet-access-request@earth.com with the word "subscribe" in the body of the message.
Subscribe to com-priv by emailing listproc@lists.psi.com with the word "subscribe com-priv " in the body of the message.
Read and copy the ISP business plan. Modify it to reflect your particular scenario. You will need to research the competition locally to fill in that part of the Business Plan. You will need firm quotes from hardware vendors.
What is next?
O.K., here is some advice that will serve you well. I am not going to review the pros and cons of all the competing options. This advice is directly from my experience and the vast body of experience of the people who run successful ISPs that contribute to the above resources.
Your servers will be UNIX based. Preferably, Sun workstations and servers. Other RISC based platforms work well, Sun is just the most affordable, especially in the used market. These are the machines that will act as your Web servers, DNS servers, Mail account servers, and News servers. Your Comm Servers have to be Livingston Portmasters. This is the standard. Your modems should be from USRobotics. The Courier brand is the best.
You will need several routers. Livingston IRX114's are great. Cisco 2501 routers offer some long term benefits because they are more flexible and talk a more advanced routing protocol.
You must select space for your main Point Of Presence (POP) in a building that has at least 500 pair of available copper (or the equivalent in fiber). Contact a phone company reseller, make the sales rep take you to lunch and find out everything you can about your local telecommunications market. Good buildings to look at are ones that have Voice Mail services in them. There are long term benefits to being in local POPs for competing telephone companies such as Metro Fiber Systems. Also, keep in mind security when selecting a site. You will have employees working the wee hours by themselves. You will want them to feel safe. You will also have hackers rummaging through your dumpsters.
Upstream Provider
Picking an up-stream provider is your most critical decision. Price is not really an issue, proximity is. MCI and Sprint are the most widely available providers but both are having trouble handling all of the bandwidth demand of new customers. Agis is one of the few backbone providers that is in the business of providing ISPs with connections. They are *highly* recommended. Contact Peter Kline at Agis (peter@agis.net).
Those Pesky Phone Lines
Your constant companion for the next twelve to eighteen months will be phone line worries. Every single time you order phone lines the Telco will mess up your entire system. Be prepared for problems. Order lines in batches of 20.
You will need a phone line and modem for every 5 customers when you launch. By the time you get to 100 modems you can stretch this ratio to 6:1. At about 300 modems you can start to slip to 10:1. (that's 3,000 subscribers!)
Those Pesky Customers
Keep your sense of humor. You will not believe the customer support issues you will have. Hire a bunch of young people to be your first line of customer support. They should be Windows and MAC experts. Teach them how to answer the phone (smile, be nice!). Give them tips on how to handle irate customers (feel, felt, found!).
Plan for Growth
There is nothing more exciting than placing your first ad in a Sunday paper and having the phones start to ring Monday morning at 9:00 AM. The trouble is they never stop! Plan for success. Adding 20 users per week is expected. Some ISPs have seen hundreds of new subscribers in the first few weeks of "lighting up".
Yes, it is hard. Yes, it takes a lot of money. But properly positioned the ISP business could be the chance of a life time. If the advice presented here has talked you out of the idea do not have any regrets! The Internet provides more opportunities for new businesses and services than any other technology ever has. Take a look at Info Consulting, Web Farming, Fulfillment Services, and Knowledge Bots. Wait a minute, there are no resources on these new fields. I'll have to put together an overview of these opportunities next.
So you want to be an ISP?
Fed up with your local Internet Service Provider? They won't answer the phone? You could do this better than they could?
This is your opportunity to get in on a burgeoning entrepreneurial opportunity, make some good money, and have your very own T1 to the Internet!
NOT! Starting an ISP is as difficult as any other entrepreneurial endeavor. It means 18-20 hour days, no time off, cash flow problems, irate customers, and hair raising network outages. It means taking yourself out of the market for the *real* opportunities on the Internet as you struggle to succeed in the Internet access business.
This is the down side of the ISP business. I have been through it. There *is* an upside. I have helped several ISPs see their way to profitability. This article shares some of the valuable knowledge I have garnered from two years of this business.
There are some reasons to get into the business that represent real market opportunities. Here are some pointers that will help identify the opportunity, avoid mistakes and get your ISP business off to a profitable start.
When to start an ISP?
When there are *no* ISPs serving your local calling area.
When the only way to get on the Internet is through AOL, CompuServe, or a long distance call. This is a true market opportunity. You are probably in an outlying area that will not see a lot of competitive pressures until after you are established.
When existing ISPs in your market are offering terrible service because they did not plan for the tremendous growth.
In this case you must be sure that the competition does not have the ability to get more capital quickly to respond to your entry into the market.
When you have *lots* of capital.
With sufficient capital you can establish an ISP in *any* market and clean up. For what is "sufficient" capital see my upcoming article "The Scaled Business Model for an ISP, $100K, $1M, and $10M Investment Strategies."
How to get started?
First, there are several resources to take advantage of. Typically before launching a new business you should "sleep" on it for several months while you review your plans with family, friends, experts. Unfortunatley the Internet moves way to fast. You have to act extremely quickly. Here are some steps to take to get educated fast:
Get David Dennis' Internet FAQ at http://www.amazing.com. This is a repository of information from the Inet-Access mailist.
Subscribe to inet-access by emailing inet-access-request@earth.com with the word "subscribe" in the body of the message.
Subscribe to com-priv by emailing listproc@lists.psi.com with the word "subscribe com-priv " in the body of the message.
Read and copy the ISP business plan. Modify it to reflect your particular scenario. You will need to research the competition locally to fill in that part of the Business Plan. You will need firm quotes from hardware vendors.
What is next?
O.K., here is some advice that will serve you well. I am not going to review the pros and cons of all the competing options. This advice is directly from my experience and the vast body of experience of the people who run successful ISPs that contribute to the above resources.
Your servers will be UNIX based. Preferably, Sun workstations and servers. Other RISC based platforms work well, Sun is just the most affordable, especially in the used market. These are the machines that will act as your Web servers, DNS servers, Mail account servers, and News servers. Your Comm Servers have to be Livingston Portmasters. This is the standard. Your modems should be from USRobotics. The Courier brand is the best.
You will need several routers. Livingston IRX114's are great. Cisco 2501 routers offer some long term benefits because they are more flexible and talk a more advanced routing protocol.
You must select space for your main Point Of Presence (POP) in a building that has at least 500 pair of available copper (or the equivalent in fiber). Contact a phone company reseller, make the sales rep take you to lunch and find out everything you can about your local telecommunications market. Good buildings to look at are ones that have Voice Mail services in them. There are long term benefits to being in local POPs for competing telephone companies such as Metro Fiber Systems. Also, keep in mind security when selecting a site. You will have employees working the wee hours by themselves. You will want them to feel safe. You will also have hackers rummaging through your dumpsters.
Upstream Provider
Picking an up-stream provider is your most critical decision. Price is not really an issue, proximity is. MCI and Sprint are the most widely available providers but both are having trouble handling all of the bandwidth demand of new customers. Agis is one of the few backbone providers that is in the business of providing ISPs with connections. They are *highly* recommended. Contact Peter Kline at Agis (peter@agis.net).
Those Pesky Phone Lines
Your constant companion for the next twelve to eighteen months will be phone line worries. Every single time you order phone lines the Telco will mess up your entire system. Be prepared for problems. Order lines in batches of 20.
You will need a phone line and modem for every 5 customers when you launch. By the time you get to 100 modems you can stretch this ratio to 6:1. At about 300 modems you can start to slip to 10:1. (that's 3,000 subscribers!)
Those Pesky Customers
Keep your sense of humor. You will not believe the customer support issues you will have. Hire a bunch of young people to be your first line of customer support. They should be Windows and MAC experts. Teach them how to answer the phone (smile, be nice!). Give them tips on how to handle irate customers (feel, felt, found!).
Plan for Growth
There is nothing more exciting than placing your first ad in a Sunday paper and having the phones start to ring Monday morning at 9:00 AM. The trouble is they never stop! Plan for success. Adding 20 users per week is expected. Some ISPs have seen hundreds of new subscribers in the first few weeks of "lighting up".
Yes, it is hard. Yes, it takes a lot of money. But properly positioned the ISP business could be the chance of a life time. If the advice presented here has talked you out of the idea do not have any regrets! The Internet provides more opportunities for new businesses and services than any other technology ever has. Take a look at Info Consulting, Web Farming, Fulfillment Services, and Knowledge Bots. Wait a minute, there are no resources on these new fields. I'll have to put together an overview of these opportunities next.
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