I left the South by Southwest Conference today thinking about how some of the best companies we know create products make life easier for those who could afford this luxury. A few quick examples: Apple, Rackspace, and NetJets. They're each companies valued in the billions, and that all comes down to their basic philosophy: make life less stressful. The big question is would you like to solve the stressful problems of the rich and famous or would you rather provide tools to a greater number of "cheap" clientele?

Apple: They've always competed against major players, but they're so popular because they make things easier and reduce stress. Macs don’t get viruses. PCs do. Last time I checked, Macs cost a million times more than PCs and with good reason.

Rackspace: Hosting frequently goes down. When you're guaranteed nearly perfect uptime, the customer's stress goes away. Sure, Rackspace has had their fair share of problems, but they still have a reputation for reducing the stress of companies and people who need 100% website uptime. They charge around 500% more than the average dedicated server provider for this assurance. While they cost a lot, it's probably more worthwhile than running your own datacenter operations.

NetJets: Flying is stressful. As you've probably seen, I hate flying commercial! NetJets reduces the stress of having to own your own jet by offering fractional jet ownership. They get you where you need to go without the stress of going through security or waiting in the airport. They cost around $500,000 to own 1/16th of a jet, which gives about 50 hours of flight time per year. I see the company as being similar to Rackspace because both cost a lot, but they give you grade A assurance for a fraction the price of owning your own jet. Not too bad if you ask me. Clients include Bill Gates, Warren Buffet, Tiger Woods, and my family. (haha, I wish)

I guess there's one major similarity among the above companies: they took a while to get to where they are now and spent millions to build their products as such. You can reduce stress at a much lower level and still make millions. Take for example Craigslist. It reduces the stress of having to go apartment hunting. eBay reduces the stress of buyers who can't find a product anywhere else. Simpler companies work too.

It needs to be understood that you don't necessarily have to start a company that "reduces stress" for the wealthy. As I've mentioned before, you have two types of companies: Companies that have mass usage and companies that go on the direct sale model. Rackspace has to manually sell its services, customer by customer. Facebook, on the other hand, has an automatic signup form. The company has very little two way interaction with its users. It seems as if "mass usage" companies can throw their products into the world without spending as much time and money. The direct sale companies require a much greater investment, but often yield much greater returns. This isn't always the case. Restaurants live by a direct sale model, but they don't prevent stress for the rich and powerful. There's a distinct difference. The best direct sale companies target the wealthy and only the wealthy.

I'll write a more thorough article on the different type of companies, what each type requires, and how to choose between the different types. In a nutshell, if you have very little time and money, it probably makes sense to throw a product out in the public under the "mass usage" model. If you have the funds (and obvious smarts,) make life easier for the rich and famous and you'll find yourself sitting on a pile of cash.

Jessica Mah is a 17 year old entrepreneur, blogger, and sophomore in college. She's currently the founder of a startup, managing editor at Startupism.com, and Jessicamah.com. In her free time, she enjoys the prospect of being an underage angel investor while partying like a rock star. (and traveling to random cities and checking into hotels while being underage)

It's a pity that Rackspace, a company with a stellar reputation for uptime and "Fanatical Support" experienced hours of downtime for clients in the Fort Worth data center. After putting in millions of dollars into infrastructure, how could something like this happen?

First, disclosures: I used to be happy Rackspace customer. I studied the way they did business and implemented it in my own dedicated server solutions business back in 2004. I'm friendly with the founders/former management of Rackspace and Serverbeach, and I've learned so much from their advice.

Just a few weeks ago, Serverbeach experienced a power outage. They took the necessary steps to get people back online within a few hours, but it was sure to cost clients thousands of hours of man power and money to fix. The damage is still there - downtime puts full time businesses out of order.

When a hosting company goes down, so many levels of the business chain are hurting. For example, I used to have servers at Sagonet, and when they had problems, all of my racks there were down. When my racks were down, thousands of websites were shut off from the world. Thousands of websites shut down mean that not only are my clients mad at me, but their clients are mad at them. And those clients may have to use these websites to serve THEIR clients, and so on. The loop can go on forever, and it all comes down to a datacenter hickup.

At that point, there's nothing you can do but wait for the machines to come back online. And once they're online, a shit ton of complain emails are bound to go to the datacenter, the leasers, the resellers, the clients, and even the clients of the clients. Companies like Rackspace who manage both the datacenter and the actually sold services are forced to compensate for lost time, or face terrible press and a huge loss of clientele.

It's particularly frustrating for Rackspace that all of this happened from a stupid truck accident that brough a transformer down. The open letter says that they had to shut some infrastructure down just to get to the accident victim. I'm sure the high level Rackspace clients wouldn't have minded leaving that poor soul to suffer if it meant keeping their websites running.

When I was in the business, problems weren't as terrible, because I targeted small businesses. Many of them wouldn't even notice downtime! Rackspace, on the other hand, serves clients such as Motorola and JC Morgan Chase. And when their services go down, the entire world is bound to know.

I'll give Rackspace credit for doing the right thing. They wrote an open letter to their clients, took responsibility, and promised compensation.

Unfortunate for them, their reputation may be somewhat tarnished from this stupid accident.

Jessica Mah is a 17 year old entrepreneur, blogger, and sophomore in college. She's currently the founder of a startup, managing editor at Startupism.com, and Jessicamah.com. In her free time, she enjoys the prospect of being an underage angel investor.

Serverbeach was awesome enough to contact me just an hour after my blog post below. Here's what the community evangelist, Charnell Pugsley wrote to me:

The current situation: All our guys are out there now doing nothing but bringing servers online and the power is stable.

Within the next few days, we will be investigating what's taken place and coming up with a solution to keep it from happening again. We'll be following up with all of our customers in the Virginia data center with an official explanation soon.

... and then provided me my compensation in the form of credit to future invoices. Not bad, considering I didn't have to do anything more than just write this blog post and email her!

In any case, this is way better customer support than most I've seen in the past. When shit hits the fan, it's often difficult to get compensation let alone receive a reply from any company representatives.

Well, cheers to ServerBeach! I'll continue to be a loyal customer :)

Jessica Mah is a 17 year old entrepreneur, blogger, and sophomore in college. She's currently the founder of a startup, managing editor at Startupism.com, SimonsRockers.com, and Jessicamah.com.

Ugh. ServerBeach killed our server this morning at about 4AM PST. Their support forums tell us there was a power outage, but then our mysql server wouldn't boot up and all of that means lost users and lost revenues over a stupid power failure.

Our first reaction was to go ape shit and yell at them, but having been in the hosting business before, I understand what they're going through. Most of this isn't directly their fault, but they do promise us almost perfect uptime. Serverbeach hosts companies such as Youtube; and when infrastructure goes down, a lot of money is lost by everyone. Even if the root cause of the power failure was environmental, fingers will be pointed at ServerBeach because of their promises of superb service towards businesses.

Although I did say I'd forgive them, I would like some reimbursement. Their SLA reads:

In the event ServerBeach fails to meet the Replacement Guarantee or customer experiences Infrastructure Downtime or Network Downtime as outlined herein, provided Customer follows the procedures outlined herein, ServerBeach will apply a credit ("Credit") to customer's account in an amount equal to five percent (5%) of the Net MRC for the affected account for each half hour of downtime or fraction thereof. "Net MRC" means the monthly recurring charge for hosting service for the server experiencing the issue excluding any add-on or optional services which are not included as part of the standard hosting plan but are included as part of such customer's monthly recurring charge.

That's just lame. I want 3 months of free service!!! Now I remember why I got out of the dedicated server business back at age 14... because I had to deal with customers like me.

Jessica Mah is a 17 year old entrepreneur, blogger, and sophomore in college. She's currently the founder of a startup, managing editor at Startupism.com, SimonsRockers.com, and Jessicamah.com.