Nah. There are still plenty of people who colo or are looking for it.
The key with web hosting is to get in with a group or niche and just try and work referrals from there. That will be considerably more productive than trying to solicit the unknown masses who penny pinch and make it unprofitable.
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Should You Email Your Members?
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Enough Said. 
"Would you rather live like a king for a year or like a prince forever?"
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