Webhosting Business Rises from Ashes of Dot-Com Bust

Former contract Web programmer turned entrepreneur chages roles, building a facilities-based webhosting business with the help of a few other good contractors.

by Alex Goldman ISP-Planet Managing Editor [September 13, 2004]

In 2002, James Dogopoulos made an audacious move that seems to be paying off. He cashed in his stocks, and invested his savings in a data center in his birthplace, Nashua, N.H

Since 2002, he has built up his company, Dynamic Internet, mainly using contractors—some of them local people, others who were friends from NANOG. The contractors support customers at the data center, which focuses on selling colocation.

It's a big switch from being himself a freelance/contract technical gun for hire, a line of work he began in 1998. The switch was made easier, ironically, by the dot-com bust. "The cost of getting into the data center business in 2002 was lower than it would have been in 1998," says Dogopoulos. "The equipment and everything was cheaper."

Built to suit
Dogopoulos asserts that part of the reason he built a data center was simply to be able to fix things when they went wrong. "That was a problem when I was a sysadmin. Sometimes it was okay, sometimes not. You can minimize the potential for problems when you have your own facility."

Dynamic Internet is the right size, he says. "We have 3,700 square feet of space. It's not enormous, but it's a lot of space."

Dogopoulos says he never even looked into buying a data center. "There are not a lot of nearby data centers built the way I wanted—although I guess I could have gone south to Massachusetts. I wanted a strong building with backup power and redundant connectivity within a tier 2 city, not a tier 1 city. I wanted it to be less expensive, but I wanted not to have trouble getting fiber in."

The goal was to build a sustainable business in one location. "Affordability was the biggest consideration. I didn't want to build a massive infrastructure that I could not support in two years because business did not meet expectations."

Although the facility started out with T-1 lines, Dogopoulos managed to run fiber to the data center around the beginning of 2003.

It hasn't been cheap, but it hasn't been expensive either. Dogopoulos describes his finances as moving like an olympic swimmer. "We were cash flow positive, but then we invested again. You go up, poke your head back under water, and go up again. That's how a startup works."

Gearing up for growth
Now the company is established, Dogopoulos is approaching a big decision: hiring his first full-time employee. He's still doing a lot of day to day work himself, however, and during our interview takes a call from a customer who is runs the e-mail server of a Boston area healthcare practice.

We chide him for not delegating enough, a criticism he accepts gracefully. "I need to delegate a lot, more than just programming. As I grow, I need to be able to support the customer as well as I do now. If a customer calls me with a problem, I can nail it directly. I need to hire staff who can solve problems." He's even contracting out press releases.

And there have been several press releases in recent weeks, as the company landed several high profile customers, from New Hampshire Republican Senator Judd Gregg (a shoe-in for re-election this year) to a website for the City of Portsmouth that includes a live webcam. "We wanted to do that to show we can support the bandwidth," Dogopoulos says.

We expect that, if successful, Dogopoulos's work day will become more like that of a CEO. He'll join the local Chamber of Commerce (he's been meaning to but hasn't yet found the time), and will participate in local events. As he reaches out to the local community, he might even ask for advice from his politician customer, Senator Judd Gregg.

The intent to do well in the local community is certainly there. "I want to help out the local guy, absolutely."

He can do well by doing good in this way. "I do sell directly, but I want to work with more agents. Word of mouth works a lot, and some sales people do refer customers. At this point, because the company is small, if approached with a smaller account, I will take it on."

—End