what would you offer free or paid hosting

Ha... Very Bad... I need to saggest you ... So should 1st strat a Free hosting hosting Company then after Got some Customers then Site trun to Paid.. You will get alot of Cash .. and Cret userd will be happy they will always be free.. Like "1st Come and 1st Serve"

many people start giving away high quality hosting services for free for few months, then after getting costumers taste their good services they switch to paid hosting with better services, sometimes also they keep the free service to attract more people to them. I think it the best strategy for starting a hosting company.

Naturally I would start with paid hosting (cheap but reliable).
I like all hostings that offer upgrade for bandwidth and hard disk (resources). With this, you can pay a starter plan for test your hosting, saving money.

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It`s definitely true that it`s better to use paid hosting as you may have s-o-o-o-o many problems with free hosting. Paid hosting is the only way to get rid of a stress! :-)