I know, I know…”starting a web hosting company is too hard” and “trying to make it as a webhost is a waste of time” because “everyone’s tried it”. (I could put more random phrases in quotes, but you get the point.) It would be like trying to start an online auction company – there have been a billion people who’ve already tried it and failed. Why? Because the concept sucks? No. Because no wants wants to use services like that? No. I’ll tell you why: because more well-established companies have already beaten people to it, and established a foothold.

Not better companies run by smarter people offering more helpful services necessarily. It’s just that they were there first.

eBay is a superb example of this. I will tell you point-blank that eBay absolutely sucks. They are a company which, if they were human, would deserve to get their ass kicked. And if that happened, people would applaud. Because they suck. But they were there first.

1and1 is another company which I hate with perfect hatred (to get all Biblical on you). They must die. They are scumbags. No, they are something worse: I hereby coin the phrase pussbags. That’s what 1and1 is. But they do tons of business. Why? Because they were there first. (Well, one of the first to get big, anyway.)

So how do you succeed as a company in an industry in which there are tons of other players with lots more money who’ve been there first? There is one very simple answer to that: differentiate yourself.

You want to know what that means. Okay, that’s fair. Because what I just said is the type of thing you read in motivational books and business success books yet never are told how to do. So here’s a real example of a company that did that. They aren’t “bigger” or in any discernable way actually “better” and they’re not even really “revolutionary” or different than their competitors in any big ways. Except for one detail.

Compucast Interactive is a New Orleans web design company. They make websites for people who need sites. They host the sites. They’ll even get you the domain name and do all that stuff for you if you don’t know how to use GoDaddy. But they happen to be very very successful and quite well-known in New Orleans. Michael Chertoff (yeah the Homeland Security guy) even wrote about Judy Weitz, the owner because he thought Compucast was so rad. So what did Judy Weitz and Compucast do that was so nifty? Here’s what I see:

• Specialized in one industry. Compucast, from the beginning, aimed toward a couple of specific areas when it targeted clients. They were the hotels and the restaurants (basically, the “hospitality” industry). They even build proprietary applications that they allowed these clients to use (for booking, reservations, etc.) and guess what? When a few of the cool kids signed up, everybody started doing it (just like drugs, guys!) and soon many of New Orleans’ restaurants and hotels signed up because that was what Compucast was known for.
• Offered specialized services. As I mentioned above, they built apps just for use by the clients they targeted. This is worth mentioning here so that I can throw another nice bullet point up. It’s also worth mentioning because it is a truly awesome strategy even if you don’t want to aim at an industry – it could be something “general” that you offer to all your clients. But if only you have it (whatever “it” is) then you’ve instantly gained yourself the label of “Different” (which can be worth $$).
• Stayed the course. Compucast Interactive was there before Katrina (you mighta heard about it – it was a storm that just missed New Orleans), during Katrina, and are still around. That tells current and potential clients that this is a company that will not go away. Reliability and responsibility are things that people will think of for quite some time when they think of Compucast. So think about that in your ventures: when you hit hard times and challenges, sometimes just not giving up will make your business worth more money in the future.
• Showed up their competitors by doing good. Yeah, I love it when I appear to be awesome and other people look like pathetic losers. And that’s what Compucast did back in 2005 when, during Katrina, other webhosts went down like a….well like whatever goes down fast. Compucast had servers in other places and kept all their clients running, and then they started offering free web services to agencies who needed it, and it ended up they looked like heroes for helping people. And those people remembered it later. And no doubt, Compucast got some $$ and is still getting business as an indirect result of doing good things when people needed it.

There are obviously other companies in New Orleans who offer web design and do web hosting, etc. And probably a few of them are really cool, great companies who do great work. But the lessons I learn from looking at what Compucast did are really easy to implement for a guy like me who might not have a huge advertising budget – this is free stuff that anyone can apply in almost any business. And the cool thing is these things can make you a giant in a highly competitive field of well-established businesses.

Stumble it!