Key takeaways
- Startups face high operating costs, and most of them fail
- Shared plans are a cost-effective solution for startups
- The host handles support and maintenance
- Shared plans are intuitive with instant setup
90% of startups fail, and 20% do so within their first year of operation. A tenth goes under within a year of launching. The failure rate is lower than average in the US at 80%.
Almost two-thirds (65%) of startups that survive enjoy longevity, being on the market for an average of 15 years. However, the success rate of first-time entrepreneurs is just 18%. Almost half (42%) of startups go under because their product fails to meet market demand.
On average, long-term startup success is between 10% and 20%. Successful startup founders attribute their achievements to business experience and relevant qualifications. Additionally, leveraging effective risk management practices and understanding customer needs are both key to sustained success.
Launching and operational costs
Startups cost as little as $3,000 to launch on average, and about 58% of small businesses start operating with less than $25,000. However, launching expenses are just the beginning. Payroll costs are substantial, as are the costs of researching the product-market fit and marketing costs. More than a third (34%) of small businesses fail because they lack this fit. A strategic marketing approach is pivotal, with almost a quarter (22%) of failing startups lacking one. Finally, funding is limited: each VC firm gets more than 1,000 proposals a year on average.
It is affordable
Evidently, the first reason shared hosting is the best option for a startup is affordability. Shared plans remain the most popular and widely accessible hosting option in 2025. Multiple websites share a server, making this type of hosting a cost-effective solution for startups.
The host handles support and maintenance
The hosting provider handles server maintenance and technical issues. This includes server configurations, security updates, and troubleshooting, freeing up founders’ time for other tasks.
It’s easy to use
Most shared providers offer intuitive interfaces and control panels, making it simple for users of all backgrounds to set up email, manage their websites, install apps, and monitor website performance.
It’s relatively scalable
Some providers offer scalable plans, letting website owners upgrade resources as their sites grow. This ensures flexibility without the trouble of managing a server.
Setup is instant
Shared plans usually come with instant setup, letting users get their sites up and running in no time.Entrepreneurs consider all of the above when testing the waters. They serve as compelling reasons to choose shared plans.
FAQ
What are the downsides of shared plans for startups?
Startups share CPU, RAM, and other system resources with other websites on the server. If the company has a compelling selling point or value proposition, it is likely to elicit interest. More visitors mean higher traffic. As the resources are distributed among users, the website might start loading more slowly, adversely affecting potential customers’ experience and SEO rankings.
Is cloud hosting suitable for startups?
Cloud hosting can be fast, secure, and user-friendly. It can ensure a robust online presence for a startup. It’s also a good choice for simplicity and cost-efficiency.
Why are shared plans better than dedicated hosting plans?
Since the host handles most server management tasks, shared hosting is often considered more intuitive and requires very little technical know-how. Dedicated hosting requires technical expertise to configure and maintain the server, over which the single user then has full control.
Is VPS hosting a good option for startups?
VPS hosting providers offer a variety of customization options, allowing the user to tailor their portion of the server to meet their site’s specific needs. Dedicated resources are among the advantages of VPS hosting. The resources are guaranteed, which significantly improves website speed and overall performance. This is crucial for startups in industries like ecommerce. A slow-loading website can turn away potential buyers, especially if your marketing strategy is ineffective.
