Starting a Business for $250

Mon 22 July 2013

In March 2010, age 18, I rented a low-grade server from Hetzner for just $214/month which I borrowed from my parents (I was living in a Canadian snow/party town on a housekeepers wage). The idea was to sell these OpenVZ VM's I had been renting elsewhere to host a few projects. At the time I named my business Fanatical VPS (now Afterburst). I also had very little knowledge about managing Linux servers. Still, I followed some online tutorials, bought monthly WHMCS and SolusVM licenses ($18, $10 respectively), a domain ($10) and setup a quick website offering my services. Total startup cost: $252.

The First Customer

I will always remember the first signup. A rush of excitement as the payment arrives and the order clears fraud-detection. A major panic as the automatic provisioning fails. Scramble to locate the problem, fix it and activate the order. Then straight to the pub to celebrate.

Turning Profit

Almost as exciting as the first customer was the day the monthly projected income rose above the cost of the initial server and licenses. I've no exact figures but this was probably around 20 VM's, and occurred mid-way through April. A second server was immediately ordered and so the expansion began. I still have those original two servers (with customers on them), although they will be retired later this year.

Ups & Downs

Throughout the years I've done a lot of travelling during summers and attending university the rest of the time. This put enourmous pressure on the business and the profit margins jump all over the place every year. Often it would go months without a single tweet or forum post, my two favorite no-cost forms of marketing. Eventually sales would almost completely dry up, which, when combined with the high churn rate of OpenVZ VM's, often made me consider shutting down.

In addition to the lack of marketing on my part, there was a period of months in which we suffered numerous major (48h+) downtimes. Unfortunately this was a combination of abusive signups and Hetzner's network policies, which are a joke. They'll happily suspend you at 6PM on Friday, but since no one works in networking all weekend, you can't do anything until Monday. Luckily we recovered after ramping up our firewall monitoring to capture this specific attack and stopped automatically activating paid orders which attracted the abusive users. We also moved away from Hetzner.

The Now

Today we are in a stable position. The business is no longer run full time by me (nor anyone technically) and is clearing a small, but acceptable, profit each month. It is my intention to take a step back from day to day management which will allow me to get a real job (fresh out of uni - the experience of working is something I really want). Despite this I have high hopes for the business, maybe it'll remain a small side income or perhaps I can pick it up full time in a few years. The future is exciting.