The Ostrich Situation

This isn't just about ISP owners; it's a problem that occurs in all businesses.

by Brock Henderson Principal, Henderson & Associates [March 18, 2008]

The other day I was talking to the owner of a technology company who sells to ISPs, and his opinion was that the independent ISP will be extinct in the next two to five years, and that internet connectivity would be the sole purview of the Telcos.

Why? Because most independent ISPs are run by techies who know nothing about business, and less about marketing. They might have all the latest and coolest technology, but don't have the business and marketing acumen to capitalize on what they have. If it isn't technology-related, they are like an ostrich with its head stuck in the sand, ignoring whatever it is they don't understand.

The death of independent ISPs doesn't really have to happen, but it will unless many of you open your eyes and take action.

The Telcos have a significant Achilles heel—they don't really do much more than provide connectivity and spam protection for their business customers, and there is so much more that can be offered. Fortunately, it really isn't that difficult to find and provide additional business related services. Many ISP trade associations have agreements with suppliers to provide you with low cost services you can resell to business and residential customers.

I am most familiar with AASP and FISPA, but many states have some sort of internet trade association that might offer special negotiated rates for products you can resell to businesses and individuals.

• American Alliance of Service Providers (AASP)
  
  
• Federation of Internet Solution Providers of the Americas (FISPA)

Ideas
Here are two easy highly desirable service ideas:

What about off site backup of a businesses hard drive? Pricing is all over the place for this service; I did a quick search and found prices ranging from $13 to $89 per month. You don't really need much to start selling this service, just some software for the customer and storage space. Bingo, you're in business. Unfortunately, as easy as it is to get into this service, most ISPs don't offer it even though it is a logical extension of their services.

You might ask, "but what about liabilities? Isn't that why ISPs don't get into this business?" The easiest way to avoid any potential liability for lost data to have redundant backup capabilities. Just as you have redundant backbone connectivity, have a backup of the backup.

Instead, local ISPs seem willing to let thousands of dollars slip through their fingers into the hands of others (call them VARs or integrators or consultants) who "specialize" in this service. Let's say you only charged $10 per gig, per month for storage: with 100 businesses storing one to five gigs per month, you would be making $1,000 to $5,000 extra per month. That's on a service that has practically no overhead expenses! Start offering off-site backup to your customers and gain some pure profit every month.

I know of one doctor's office whose version of offsite backup is this: the office manager copies all their files to a portable hard drive and takes it home with her every night. Don't you think she would be extremely interested in an easier solution?

Note that the offsite storage does not require they be a connectivity customer of yours; you can offer this service to every business in town regardless of who their ISP is. That means you get a foot in the door with customers of rival ISPs.

Another fairly easy service to start offering is web filtering. Businesses lose thousands of dollars every year because employees are surfing the web looking at porn, bidding on eBay, or even playing online games rather than working; and families want to be able to keep porn and other objectionable websites away from their children. Are you offering this service? It's available to you to resell and gain a nice profit if you will just do it.

Many suppliers of these resell services will also provide you with marketing materials that you can customize with your name and logo, so you don't even have to come up with the marketing materials yourself! All you need to do is get the info into the hands of your customers and potential customers.

There are two services you can sell to existing customers or to anyone else who wants it, and you don't have to deal with the objection about having to change their e-mail address since they don't have to switch Internet providers.

Conculsion
Now here's the question only you can answer: Will your business be strong and financially healthy in two years, or will the telcos beat you?

Personally, I hope my friend is wrong and that you and every other independent ISP survive and prosper, but it is all up to you.

Don't be an Ostrich with your head buried in the sand, look around and find those services you can quickly incorporate into your business and begin selling them. And don't limit your sales efforts to existing customers; offer the services to every business and individual out there.

There is an old marketing axiom: Innovate or die. Don't be an ostrich with your head stuck in the sand doing the same old thing . . . innovate . . . expand . . . grow . . . and soar with the eagles.

—End