Flashcom's Verizon customers sold at $100 a head > I tracked down Moon Global

I tracked down Moon Global

"They" appear to be one person, a Mr. Munir Moon. According to what I heard, he didn't even want to shake hands with the other ISPs that were there.

But I will tell you that the guys who ran Interworld and Clubnet, two of their acquisitions, knew their stuff and ran tight networks. I don't know how things are now, but a few years ago, you would have had a hard time finding anyone complaining about anything with either company - except perhaps they don't have the lowest prices.

[text was edited by author 2001-04-04 20:55:55]

reply to nickb
Thanks! I just sent them an e-mail and I received a response in less than 5 minutes. I was told to go to www.webuniverse.net and fill-out the migration form.

I'll let you know.

reply to nickb
Here's a story about a whole new industry that is popping up. I know. I tried to get part of the action.

1) Company like flashcom falls on hard times and begins shutdown process. Some of the assets of this company can be quite valuable if you reduce the overall cost of support.

2) This was our plan. Which I will bet is not unlike the plan of mr moon.

Purchase the lines from Flashcom. We were willing to go as high as 50 a line and not 100 a line. The fact is that there are really only about 1700 of these lines still active in the Flashcom world.

Once you have purchased the lines, all you need is a colocation space (preferrably at Exodus where they simply move the x-connect to your equipment) Equiped with something like a used Redback SMS500 which will cost you a few bucks (25K say on the 2ndary market) Since all the GTE lines are based in Southern California, you get a single DS-3 from GTE and group all 1700 customers on a single pipe. (this is no big deal since GTE's JADE release of their PVC manager will handle up to 2400 PVC's on a single circuit. We routinely ran 3500 PVC's on a single connection to Covad. (and you say DSL isn't shared and oversubscribed...HA)

Once you've done this, you could easily make the transition in one fell swoop to migrate all the customers from Flashcom to ISP-X. Here's the really kewl part.

Lets say that the average GTE customer is paying 49.99 a month. Lets say that there are 1500 customers which you end up paying for (remember, he only pays for those that migrate). Lets say that you pay for 150K for your customer base and 50K to get you up and running in a new colo. Lets say that your DS-3 and bandwidth charges are about 5K per month. Thats and investment of 225,000 for the first 5 months of servicing these customers. At an average of 49.99 a month in charges on 1500 customers, (appx 75K per month in revenue) then the ROI is at the end of month 3. Everything past that is GRAVY.

Ok, but what about phone support and all that stuff. Well you outsource it to someplace like the Sutherland Group in San Diego where Telocity outsources to. You pay say 5 a month per subscriber (7500) and then you pay a few more a month to critical path to run your mail and news services.

So basically, after 3 months, you have a money making engine which will turn over just over 50 grand a month with little or no administrative cost or expense.

Now you may be thinking...ewwww robber baron. But honestly, this may be one of the few companies offering DSL which may actually make money. This is why the little mom and pop shops focusing on ONE market can and will survive. Its the NETWORK which becomes the problem. Its the EXPANSION into new markets which sucks up capital.

So for you GTE customers which I wish had become MY GTE customers, good luck. Your services should be good. Your customer base had the least number of problems and the lowest support costs. I would feel comfortable moving my service to moon global. You're a hell of alot better off with them than you were at Flushcom.

And to Peter Moon. I hope that rumor about RR attempting to extort an additional 200K from you for network operating expenses wasn't true. If it was, I'd have to change my opinion of him from just plain stupid to down right criminal.

The Truth shall set you free. But you'll still need a line release form to get away from Flushcom.

Re: To deakonblues2k........ROI in 3 months

You know Delta you are one ignorant son of a gun. You have no clue. You have no brain. You got nada. Read something other than the funny pages.

AND I QUOTE MYSELF:
This is why the little mom and pop shops focusing on ONE market can and will survive. Its the NETWORK which becomes the problem. Its the EXPANSION into new markets which sucks up capital.

Delta you just suck.

Would you not consider your last post rather abusive?

Or are you always so cordial to people who post differing opinions here.....ummmm are you a republican by any chance?

In the mean time I hear this in the background for you soon......Guide......Guide.....Guide.....Guide.....Guide, why doesn't my email work.....Guide.....I can't get in my chat room....Guide.......guide......guide.....
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The Future Is Purchased By The Present!

reply to deltat2000
Think about it... Customer costs $50 and is UP and RUNNING. Great bargain...

Flushcom paid $200 to install $200 for modem, and god knows how much time spent following the order to completion. Oh yeah, and advertising...

If every ISP could spend only $50 to acquire pre-qualified customers , well, there'd be a lot less bankrupt ISPs.

reply to Anon

Re: I tracked down Moon Global

Not so. In the beginning, PacBell created major issues because they wanted to bill for the loop, and we would bill for the ISP services. This did not work out very well. In the end, the ISP was charged a lump sum for the customer loop and the service.

As to the bandwidth and colo, there are alot of providers who have recently empty cages, racks and partials. The SMS500 is like a 5u unit and the supporting equipment such as a few sun Netra servers (for DNS and Radius) and out of band management would take up like 12-15u of space. This could easily be had in half a rack or less in a shared colo room. The bandwidth costs can be negotiated until day turns into night. The costs will obviously be varialbe and as such your monthly income will vary. However, a 50K buffer leaves a lot of room for bandwidth charges.

The KEY (and would have made this much more clearly had I known you were going to post this on the front page ) is that without Advertising, without the staff that it takes to shepard an order through the provisioning and installation process, and without the need for expensive back end automated processes for billing, trouble ticketing, and accounting (all outsourced) DSL CAN be a profitable business.

reply to justin
I have to side with Justin here. 5k a month is a GROSS under-estimation of costs for co-location and bandwidth. 5k a month is like 50$ a month to the big dogs. Costs for that kind of pipe start along the lines of 2-3k for 2mbit and up. Nowhere the near the full speed a DS3 offers. Co-location is not chump change either. All in all the costs would really be much much higher then 5k.

I think this story is a nice fairy tail but in practice, its just that, a fairy tail. There are so many more aspects to the business then getting customers, bandwidth and location.

One company that seems to be doing things right is Flex.Com in Hawaii. If only more ISPs followed the same practices they do...

ohhhblahdee ohhhbladah...
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..::drum and bass cannot be stopped::..
[text was edited by author 2001-04-05 10:28:33]

I beg to differ. You would really be surprised at how little traffic 1700 largely residential users pass on a sustained basis. Most of the traffic req could easily be satisfied with a 5-10 meg ethernet handoff. lets say your DS3 and bandwidth costs amounted to 10K a month. You still have a HUGE profit margin. The actually COST of the DSL line is in the human support factor. Remove the support factor or get it on a managable cost basis (such as outsourcing) and you can easily turn a profit. The problem is that BIG isp's employ dozens of customer care people, dozens and dozens of tech support and provisioing people, and a good sized application development group to work on the systems and an accounting department. Not to mention big C-Level salaries which easily reach into the hundreds of thousdands of dollars with kick ass bonus plans. You wanna know why the ISP's are going out of business?

In this scenario, ONE PERSON could actually run this ISP and outsource everything at a relatively FIXED cost thus ensuring that the margins are met and the bills get paid. Give me a copy of ICVerify and and Excel spreadsheet and I could personally bill 1700 customers in a weekend.

The real costs are behind the lines...

The *theory* is great. I still think the practice will fail. Even if you have prequal customers, you still need to advertise. How long do you think things can stay as is and still turn a profit? Costs change daily. You can negotiate costs all you want but they will go up. You have to advertise and seek growth. These things cost time and money and for a small while, MAYBE one person can manage it all, but in the long one you need people. And people are just the beginning. Until the model you speak of is done and is shown to be profitable I will continue to see the idea as nothing more than a fairy tale. Its easy to say companies have too many tech support personnel etc but the fact is, with the current state of end users today, companies need those personnel.
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..::drum and bass cannot be stopped::..

Dear Friends,
Fascinating discussion.
The theories behind fixed-cost capitalisation, and growth based forward depreciation bases are being compared in a practical setting, which, if the costs were predicted accurately for the fixed cost model, would allow for a relatively high margin.
Who among you wonders how a "trading firm" survives, when there a often monthly losses, which would appear unsustainable?
Leaving aside covered fixeds, there is always revenue from the co-commissions on trades.
Thus, trader joe loses $20k, while costing himself commissions, whereby the firm supplying his desk may take have of those commissions going to the clearing firm. Thus, if Joe were to have lost his money on trading 400k shares, at around 1.5c per, total commissions before rebates= $60k, thus the firm, garnering 50% of the commissions, before fixeds has a profit before rebates. After rebates, costs, &c, although the individual is in deep shit, the firm is about even on its capital, on a cost basis. Given even marginal risk control, most trading firms do well for the limited partners. Analagous to the EU's fifty dollars per mensam.
Although no one, myself included, would recommend deacon's business model for the fainthearted, there are many theoretical reasons why it would succeed. The cost variable seems to be the fact in dispute here. My own experience is that the costs would probably be higher than deacon's estimates, thus protracting the profitability window. Therein lies the problem. SAP would not view the monthly costs as having been investment, but recurring. Nor can I foresee the ability to depreciate the original cost of buying the prequals, since, if deacon's analysis is correct, the value thereof would remain for accounting purposes, constant. Thus, the purely EBIDTA model which he employs as his basis for asserting profitability.
Should an unindemnified expense occur, the cost is immediately apparent against the current income, and thence, reduces operating capital.
The trading firm system works, because the firms, as does Deacon's model, rely upon outsourcing, such as AT financial. When AT's servers are down, the trader is out of luck. Given the miniscule amount of down time for such a service, losses are infinitesimal. Now, look realistically at DSL. Can anyone name one mail-server, or internet based mail service where one would willing put mission critical communications?
Thus, Deacon's model has one important hole, which lies in the bandwidth philosophy expressed. While true that I, as a home user, use very little bandwidth, I, as do many, rely upon my connexion for my scheduling, etc. The argument may be made that this is foolish, but I would wager that more of us do this than not, to say nothing of how angry I would be if my children could not access their homework, also 'net based. Thus, the "pure" residential user is apocryphal, and multiple redundancy or indemnification becomes necessary.
Then the final CLEC issue, which also affects SAP remains, can one base future profits upon the fixed costs, having reduced initial capital expenditure based upon buying assets at pennies on the dollar? My guess is, with decent luck, probably. But as easily as Deac says. Not likely. The run-out date for profitability would have to be clearly aligned with the cash burn rate.
In short, a very good idea for an entrepeneur seeking reasonable income, who is not betting the rent money for this year, or his bairns' meals. A dirt-cheap chance to drive a Porsche by 2002? Circumscript "maybe." A business with minute personnel costs, low initial capital requirements, and a source of sustainable income, where income and no growth is wanted, may indeed work.
Could one sleep while running it? Not likely.
All good wishes,
yazdzik

reply to deltat2000

Re: To deakonblues2k........ROI in 3 months

said by deltat2000:

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Gee didn't I hear somewhere that all you isp's were just losing tons of money to provision us......that you all didn't make a dime for at least 3 years?

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reply to Anon

Re: I tracked down Moon Global

reply to Anon
ignore this dupe post
[text was edited by author 2001-04-05 13:23:41]

reply to Anon

said by deakonblues2k:

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Not so. In the beginning, PacBell created major issues because they wanted to bill for the loop, and we would bill for the ISP services. This did not work out very well. In the end, the ISP was charged a lump sum for the customer loop and the service.

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reply to Anon
Lets pray that you never have access to a copy of ICVerify,

and you definately need to get some training in Excel......lmao
--
The Future Is Purchased By The Present!

While I see a lot of posters, with the exception of deakonblues2k none of you appear to be in Southern California or running an ISP there. Now some of the things in his plan I can't comment on.

1. Cost of DSL loops from GTE: $32 and change for ISP with ~400 customers--bump that number up and you get better profits.

2. Cost of Frame DS-3 $2700 for a 22mbps CIR--note this is just the backhaul for the DSL loops.

3. As to Co-lo costs--I don't know the cost exodus, but rack space in my neck of the woods is about $1500 per month.

4. Internet bandwith costs--Typically are cheaper at colo spaces since they can use a throttled 100mbs lan connection--Broadwing does this at 1 Wilshire. 3 Mbps (dual ds-1) is 1800 from Sprint. 9 Mbs was something like 6500.

5. I would definately not outsource mail or webhosting. One of the thing keeping the smaller ISPs alive is that they can offer a variety of services.

6. Outsourcing level 1 tech support is a good idea. That type of support is easily replaceable.

7. As he says expansion is the real cost. If you could walk into 1700 customers with an acquisition cost of $50 it would be a sweet deal. I would then only advertise as needed, however word of mouth seems to be the best way. (I include this site in word of mouth. As long as you can keep a pool of customers at the 1700 mark you could make the model work.