For those that have followed me for sometime, it’s likely you’ve heard about A.D.P:
Adapt, Develop, Progress
This three letter acronym is what I’ve used to develop seven Internet-based businesses since 1998.
I suppose you could even put this more bluntly:
Adapt Or Die
If we look at the web hosting industry specifically, there are thousands of companies that were once leaders in the late nineties only to be “put out” by a college student in his dorm room in Florida (Brent Oxley a/k/a HostGator).
What We Can Learn From Toys”R”Us
Before we answer that, let’s switch gears from web hosting for a moment and talk about toy retailer Toys”R”Us.
Growing up in a small town from West Virginia, it was a treat when I was younger, to make the hour drive to the nearest Toys”R”Us and get to pick out a toy.
I can remember being little and my mom having her sister who lived in Texas or my grandparents in Florida purchase “hard to find” items and have them shipped up.
That’s how it used to work.
Toys”R”Us was the leader in retail for toys and people went out of their way to shop their stores.
Fast forward to the days of Internet specifically Amazon.
I personally do 90% of my shopping there.
With a couple clicks on my computer or my iPhone I can find the item I’m looking for, read the reviews, and most of the time purchase it at a lower price than any store.
It’s fast, easy, and with my Prime membership, the item arrives on my doorstep usually in two days. I even subscribe to common house-hold items so I don’t even have to worry about going to look for them.
Recently Toys”R”Us announced they would be closing all their remaining stores, a couple months after filing for Chapter 11 bankruptcy protection.
Before they close, go to one of their locations and take a look around.
Still looks a lot like 1994 if you ask me.
Even though once very successful, doing the same old thing over-and-over again doesn’t work! Adapt, Develop, and Progress with the changing times.
What Could Toys”R”Us Have Done Differently?
Toys”R”Us saw the Internet coming, but instead of grabbing it and running with it, they put their business in the hands of the enemy.
In 2000 they signed a 10-year partnership with Amazon giving them the exclusive rights to sell their toys.
While it sounded good on paper, Amazon didn’t honor the deal, claiming Toys”R”US couldn’t carry enough stock and failed to offer the most-popular-goods.
Even though in 2005, they filed a lawsuit, and won to terminate the agreement, severe damage had already been done.
What about the stores themselves? The “old retail” model simply doesn’t work anymore.
Stocking a store full of toys “used” to do the trick, but when you can have access to an endless inventory online, what is the motivation to drive out to a store?
Why didn’t they consider using some of their store space to offer something entertaining to kids. Look what LEGOLAND is doing in Kansas City as one example.
I don’t have all the answers, but obviously their way of doing things, didn’t work as they hoped.
How We See This In The Web Hosting Industry
Looking back to the web hosting industry, HostGator seemed to come out of “nowhere” in the early 2000s quickly gaining business over other top names.
Off the top of my head, I remember companies such as CommuniTech.net, Addr.com, Dial Tone Internet, etc. all that have vanished or are still around in very little capacity.
HostGator hit the ground running, developing a high quality hosting product, for an extremely good price, with very good customer service.
Where everyone else saw a market flooded with competition, Brent saw opportunity and capitalized on it, eventually selling to Endurance International Group for 200+ million.
But as we see with many large corporate takeovers, change doesn’t happen as fast, because things have to be voted on and approved by a board. It’s not as simple as creating new services and setting them live. Decisions are more closely calculated and it takes time.
In my opinion this is one reason why we’ve seen HostGator start to degress their position in the industry as a whole.
What Does This Mean For Web Hosts?
Simply put, Adapt or Die.
The Internet is still evolving.
Things are different today than they were yesterday. Tomorrow will be even more different.
It’s often said that time moves very fast in the “digital world.” Just look at where we are with smartphones in comparison to just a decade ago.
As a web host, we have to be completely willing and open to consistently change up our offerings catering to the evolving webmasters.
Nowadays with platforms such as WordPress anyone can have a professional website online within a couple of hours.
Gone are the days of having to learn HTML, hire a developer, purchase a web design, etc.
Throughout much of our Reseller Training I try to get this message across to our current and prospective customers.
There is still a HUGE need for web hosting, but it’s not the same it was even five years ago. Next year, will be a lot different than this year.
That’s why as CEO of NameHero I must operate with an open mind and always be willing to learn each day from my staff and customers.
Web Hosting: Adapt Or Die
I filmed a video where I get on my soap box and discuss this in a bit more detail:
Feel free to leave your comments below!
Ryan Gray is the founder and CEO of NameHero, one of the fastest growing independent web hosts in the United States. Ryan has been working online since 1998 and has over two-decades experience in Internet Entrepreneurship.