The internet continues to grow at a rapid pace, not only in terms of the amount of websites online, but also internet use and business done online. A very natural and good thing has happened as a result - the cost of “space” on the internet has gone down. Virtually everyone wins in this situation, with the exception of those attempting to make money in the web hosting business.

Having operated websites long enough to be complaining about web hosting costs in 1999, and also having headed a web hosting business that is alive 3 years later and now part of my Tilted Pixel venture, I’m going to take you on a tour of the web hosting industry and show you what happens when you choose to start a business that is snowballing towards commoditization. If you know what web hosting is skip the next two paragraphs and jump right in, otherwise I have a little intro to help you along.

In case you aren’t completely familiar with how internet services work, the internet is literally run by a whole bunch of computers. Some computers at the very top of the hierarchy hold the whole thing together, but beyond that anyone with a computer and internet connection can not only go online, but they can also make their computer a part of the internet by providing services such as a website. By providing services your computer is now deemed a server. This architectural quality of the internet is great because it allows anyone to contribute and makes it very difficult for any single entity to assert control of what the internet contains.

If you are running a website you typically don’t want to run it on your machine due to the administration involved, high bandwidth requirements (a cable modem doesn’t stand a chance), and increased hacker risk, so you purchase a set amount of space on a machine run by a hosting company. Reputable hosting companies have special equipment operating in data centers - large facilities with incredibly high speed connections, redundant power systems, and 24/7 technical staff.

The Business and Economics Behind Web Hosting

Renting space on a hosting company’s server 10 years ago was far more expensive than it is now. This is primarily a result of the fantastically decreasing costs of computer equipment powerful enough to operate a website server and the shocking price cuts in bandwidth itself - the cost of actually being hooked up to the internet pipes capable of handling web server traffic. Alongside this a host of web server administration products was released and evolved, making it far easier than before to operate a web server.

So prices fell and hosting became cheaper. Why the hell are you boring me with this Matt? Well these price cuts and user-friendly software eliminated the barriers to entry, an economics and business concept defining the obstacles to entering a certain market. These obstacles include everything from government regulations, cost of start-up equipment, patents held by competitors, special expertise, etc.

The brunt of this occurred several years ago when the cost of renting a web server suddenly plummeted drastically. At the heart of this was Server Matrix, a new venture by capital-heavy Texas company The Planet. Leveraging economies of scale and an aggressive growth strategy, Server Matrix pulled a Walmart and started renting web servers at insanely low prices. The rest of the major providers quickly fell in line behind them and began providing the same. The funny thing is that by this time computer technology was advanced enough that these new cheap servers were more powerful than far more expensive web server equipment bought two years ago.

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My Barriers to Starting Your Own Business article has been featured in Entrepreneurship Carnival #13. This is a weekly traveling carnival providing a great way to dig up some gem entrepreneurship articles and resources.

Carnivals are an excellent idea existing for an insane amount of topics, some very niche. To submit a post from your own blog to a carnival visit the blogcarnival.com directory.

Scientific American recently posted an article by Michael Shermer on the “Self Help and Actualization Movement (SHAM)”, painting self-help as a scam industry. It’s an interesting piece and well-worth a look at, although based on my own experiences I have to disagree with Shermer.

The core of Shermer’s view is quoted below:

SHAM takes advantage by cleverly marketing the dualism of victimization and empowerment. Like a religion that defines people as inherently sinful so that they require forgiveness (provided exclusively by that religion), SHAM gurus insist that we are all victims of our demonic “inner children” who are produced by traumatic pasts that create negative “tapes” that replay over and over in our minds. Redemption comes through empowering yourself with new “life scripts,” supplied by the masters themselves, for prices that range from $500 one-day workshops to Robbins’s $5,995 “Date with Destiny” seminar.

That’s pretty scary, and the worst part is that it’s not entirely false. There are people out there addicted to the stuff and shelling out an amazing amount of money without corresponding results. There are also plenty of self-help “gurus” out there more than happy to provide high-priced products and like with any other industry, not every product is worth buying.

I Have Received Great Results from Self-help Without Spending a Fortune

I have only been reading material that would fall under the category of self-help for three or four years. I don’t read it often and I am picky about what I do choose to read. To me every book is a significant investment in time and mental power, so I pay close attention to reviews and try to be objective about what I can expect to gain from reading. The results have been absolutely phenomenal.

The single greatest thing that self-help has taught me hasn’t been optimizing my sleeping patterns, eating better, thinking positively, or exercising regularly. It has taught, or to be more accurate, infused in me the notion that the average is highly below standard. This isn’t about crazy elitist egotism, although humility is a skill to be learned in itself, it’s about realizing that surpassing the average is really easy. That’s a complete 180 degree reverse on how most of us are brought up, and certainly how western society as a whole is shaped. As a society we put people who make significant accomplishments on a pedestal. They are out of the ordinary, blessed with exceptional talents, mental abilities, or bodies. An elite super people, a portion of which we follow on the TV with hungry eyes wishing we could be like them, but knowing that these are just silly dreams and that it won’t happen.

These super people really aren’t that better, they just did certain things and had certain attitudes that most of society does not. Attitudes that most of society has learned to fear and dismiss in order to revalidate their viewpoint that what they have is all they can get out of life.

Most self-help gurus, regardless of the quality of their individual advice, realize this fundamental problem and the need for an attitude shift. They preach this information in the ways that they can, and thanks to supply and demand the ones with some business savvy make a lot of money. They attract some people who take this advice to heart and use it to change their thinking and ultimately their lives. Then there are the people who are looking for a quick fix and in best case will read the book, feel “motivated”, run around in circles, and eventually fall back into their old patterns. Then they buy more stuff and create a ghastly scam image.

and Here’s Why I Disagree With Shermer…

Shermer points out a statistic that the biggest self-help customers on a topic are those who have bought a product on that topic before. Shermer then suggests that if the previous book on the topic should have helped you, then you shouldn’t need to buy another one. That’s only a valid argument if you are one of those people that reads a lot but learns nothing, or if you buy into the fallacy that self-help admittedly loves to paint - everything is a quick-fix. Books and lectures aren’t magic. They can be empowering, motivational, and educational, but ultimately it’s still up to you to get up, take the book’s advice, and then apply it for 30 years, not 30 days. Concepts tackled by self-help are deep subjects just like engineering, architecture, and philosophy. A single $19.95 paperback won’t educate you about everything there is to know on the subject and with so much left to discover in these areas what you end up reading is only one method or viewpoint of a single author.

Take charge of your life and be responsible for your actions and faults. If a book promises you results and you don’t achieve them, the solution isn’t to buy a $500 audiotape or attend a $6000 seminar. Go look at what went wrong. Is the advice the author preaches reasonable for you to implement? Are you actually doing what the book tells you? Did you give up after 30 days?

So how much have I spent on self-help? Not a whole lot. Depending on which books in my collection you classify as self-help, that number is as low as $200 or as high as $300, over the course of several years. To put things in perspective I spend about $60 a month on coffee, an unnecessary and unhealthy habit. A university course costs $500 a pop in Canada. If you aren’t attending $6000 seminars then self-help is some of the best value out there. Every book provides nuggets of useful information and even one “Eureka” moment per book can have life altering results.

Other Viewpoints

• “Self Help and Actualization Movement (SHAM)” by Michael Shermer
• WHY read self-development books? by Paul Piotrowski
• Is Self-Help a Scam? by Steve Pavlina
• Analysis of Robert T. Kiyosaki’s book Rich Dad, Poor Dad by John T. Reed