Has the recent growth in the VPN industry inspired you to start a VPN business? Well done! You’ve finally made the right decision! Even though it could seem difficult at first, the outcomes are worthwhile. The virtual private network market is anticipated to expand by USD 47.82 billion at a compound annual growth rate (CAGR) of 16.28% between 2023 and 2028, predicts Technavio.
These numbers ought to motivate you to act. As an alternative, you might work with a white-label provider. They take care of everything simultaneously, or you may take full charge and start a VPN company using your skills and experience. Regardless of your path, it’s critical to understand the basics of starting a VPN company.
How to Start a VPN – The Basics
Whichever route you choose, it’s vital to comprehend the fundamentals of launching a VPN business. Before starting your own VPN business, here is what you need to know:
Target Audience
To cater to the preferences and requirements of the VPN market, you must determine your target audience. Here are some possible target groups that you may choose from when starting a VPN business if you’re not sure who you want to serve:
Consumers
Your target market should be your primary concern if you intend to assist customers directly when launching your VPN company. Investigate the demographics of the customers you wish to target first. According to statistics from The Independent, men make up 54% of all VPN users.
Since using a VPN is prohibited for anybody under the age of 16 in many countries worldwide, your best option when choosing the age range of customers to target is late teens and adults. Two-thirds of VPN users are between 16 and 34, per a GWI survey.
It’s often expected that Gen Z would use VPN technology more than Baby Boomers, but the gap in usage between the generations is quite significant. The 16-24 age group constitutes 35% of all VPN users, making it the largest demographic. The next largest group, the 25-34 year-olds, accounts for 33% of all VPN users. Conversely, Boomers—55 and older—represent a mere 4% of the VPN user base.
Consumers require VPNs for various reasons, but you should focus on catering to the following major needs that they might have:
- Many individual users search for VPNs to unblock content that is restricted in their region, such as streaming services or news websites. If we talk about facts, half of all users say they use VPNs for better access to entertainment content.
- Using VPNs to encrypt data on public networks helps protect against hackers and data thieves.
- VPNs can prevent tracking from advertisers, Internet Service Providers (ISPs), and government surveillance, preserving user anonymity online.
Businesses
Businesses require strong VPN solutions in the contemporary digital environment to enable safe communication within the organization while safeguarding sensitive information and upholding confidentiality. In fact, according to Cybersecurity Insiders, 93% of organizations worldwide are already using a VPN or thinking of getting one soon. This surge was fueled more after the COVID-19 pandemic due to the recent shift to remote working. It is said that 71% of companies worldwide scaled up VPN capacity during the COVID-19 pandemic, and around 2 in 5 remote workers now use a VPN.
If you consider businesses as your target audience, there are certain features that you need to have in your VPN:
- Dedicated IP Addresses
- Team Management Tools
- Enhanced Encryption
- Remote Access
According to Cybersecurity Insiders, the lack of visibility into user activity is the number one challenge faced by companies with VPNs. Catering to this need by providing businesses with Dedicated IP addresses and Remote Access can help you retain a large portion of the VPN market.
Specific Regions
The internet is heavily controlled or monitored in some parts of the world. People there might need VPNs more than others to access the full internet freely and safely. Qatar currently has the highest VPN adoption rate in the world, followed by UAE, according to the latest available data. Customizing your VPN business according to these needs can set you apart:
- VPN usage is illegal in regions like Belarus, Iraq, North Korea, Turkmenistan, and Oman. In places like Uganda, the United Arab Emirates, and Russia, it is banned. Targeting your VPN audience to regions like Russia, Uganda, Qatar, and UAE will help you get a better user base. Moreover, you should also opt for countries like America as almost half of the American population uses VPNs for either work or personal use, according to Security.Org.
- In places like Europe, where data protection laws (e.g., GDPR) are rigorous, VPNs that offer enhanced privacy features and comply with local regulations can appeal to privacy-conscious users.
- Offering VPNs with advanced security features like automatic kill switches, DNS leak protection, and multi-factor authentication can attract users in regions prone to cyber-attacks.
Legal & Compliance Issues While Starting a VPN
Understanding the legal and regulatory repercussions before starting your own VPN business is crucial.
Jurisdiction
Several countries, including Belarus, Iraq, North Korea, Oman, and Turkmenistan, have laws that expressly forbid using VPNs. These countries forbid VPN use to control internet content and prevent circumvention of state censorship. For example, VPNs are prohibited for the general public in North Korea because only a few government personnel can access the worldwide internet. Meanwhile, nations like Uganda, the United Arab Emirates, and Russia place severe limitations on using VPNs, controlling or restricting access to stop users from getting around local material prohibitions, or protecting national security.
For instance, employing a VPN for illicit purposes might result in fines of up to $545,000. In addition, there are 11 additional countries where using a VPN is not strictly forbidden but rather subject to weaker regulations, such as the need for VPN providers to register with the government or the prohibition on accessing politically sensitive information over a VPN.
Data Laws
Laws such as the California Consumer Privacy Act (CCPA) in the United States and the General Data Protection Regulation (GDPR) in Europe require strict guidelines for collecting, storing, and sharing data. For instance, the GDPR mandates that businesses safeguard personal data under their control and get consent from individuals before processing their data. This may have an impact on how VPN providers manage user data, especially when it comes to data encryption and user permission. Compliance reduces legal risks and builds user trust—users are concerned about data security and online privacy.
Partnership Agreements
Additionally, it is imperative to ensure that your partners in partnership agreements follow appropriate legal requirements, particularly if your VPN service depends on third-party services for server infrastructure, software, or other essential components. This entails confirming that they abide by applicable data protection laws and best security practices, which might affect your service’s overall security posture.
Infrastructure & Technology Needs
After addressing the issues mentioned above, it’s time to discuss your VPN company’s infrastructure and technology requirements.
Server Network
Any VPN service’s server network is its foundation. The performance and accessibility of your service can be significantly improved with a large, well-located server network. Depending on your technical expertise and budget, you might rent server space from established data centers globally or invest in setting up your servers. Although renting might save money upfront and make maintenance easier, owning servers could provide you more control over the functionality and security of the network.
Software Development
Choosing protocols and encryption standards is necessary to create user-friendly and safe VPN software. Different speed and security balances are available with protocols like OpenVPN and WireGuard, which are well-known for their robustness and dependability. Secure encryption, such as AES-256, guards privacy and data integrity. Additionally, users should be able to log in, select server locations, and modify settings easily, thanks to an accessible software interface.
Scalability
In the VPN sector, putting in place and keeping up-to-date security measures is a must. This includes using secure authentication techniques, conducting frequent security audits, and upgrading encryption procedures to protect user connections. For example, putting multi-factor authentication (MFA) into place can increase security and reduce unwanted access. Regular VPN software updates and patches ensure that vulnerabilities are promptly patched, preventing hackers.
Security
Implementing and upholding the highest security standards is a must in the VPN business. This includes conducting routine security audits, upgrading encryption procedures, and using secure authentication techniques to protect user connections. One way to increase security and lower the likelihood of unwanted access is to use multi-factor authentication (MFA). Hackers are deterred by the VPN software’s regular upgrades and patches, guaranteeing that vulnerabilities are fixed sooner rather than later.
Options for Starting a VPN Business
Now that you have determined your target market and all other relevant factors, it’s time to decide on the best course for your VPN business.
Option # 1: DIY Approach – Creating A VPN from Scratch
The first option on how to start VPN business is doing everything independently from scratch, which can be daunting if you don’t have the skills and resources.
Challenges
- Technical: Setting up a VPN involves complex software and hardware management. You must be well-versed in networking protocols, encryption standards, and server configuration. Technical setup includes choosing the right VPN protocols (OpenVPN, IKEv2, WireGuard, etc.), implementing strong encryption to safeguard information, and managing a global server network to provide stable and fast service.
- Operational: Running a VPN requires continuous oversight, including server maintenance, software updates, and network monitoring. This can require a lot of resources; therefore, it’s important to have workers who can quickly resolve outages or performance issues by managing network operations 24/7.
- Legal: VPNs must comply with international and local regulations, including data protection laws like GDPR in Europe or the CCPA in California. Legal knowledge is necessary to navigate these regulations, which can result in significant time and financial costs associated with the legal process.
Necessary Resources and Expertise
- A team of IT professionals skilled in network and server management, security protocols, and software development.
- Legal consultants or an in-house legal team to manage compliance with global data protection laws.
- Financial resources to cover upfront and ongoing expenses related to server infrastructure, software development, and operational management.
Step-by-Step Guide to DIY Your VPN Business
Here are step-by-step guidelines if you wish to create your VPN business from scratch:
Step 1: Research and Planning Phase
- Study existing VPN services to identify gaps in the market. Focus on price, features, speed, and geographical server locations.
- Research legal and regulatory requirements in your target markets. VPN laws vary widely across different countries.
- Decide on pricing models (subscription-based, tiered access, etc.), target audience (businesses, individuals), and operational scale.
Step 2: Technology Setup
- Purchase or rent servers in multiple locations to ensure widespread geographic coverage. Cloud services like AWS, Azure, or Google Cloud should be considered to ensure scalability.
- Choose between using ready-made VPN server software (like OpenVPN or SoftEther) or developing custom software. Think about the security features, ease of setup, and protocol support.
- Configure your servers for VPN protocols (e.g., IKEv2, OpenVPN, WireGuard). Implement strong encryption and security practices.
Step 3: Website and User Interface
- Build a professional website that allows users to sign up, download the VPN client, and access customer support.
- Develop or customize VPN client software for various platforms (Windows, macOS, Android, iOS). Make sure it has features like auto-connect, server selection, and a kill switch. It should also be user-friendly.
- Integrate secure payment gateways that support multiple payment methods and currencies.
Step 4: Security Measures
- Use robust encryption standards such as AES-256 to secure data transfers.
- Decide on a data policy. Many consumers prefer using log-free VPN services.
- Schedule regular security audits and penetration testing to identify and mitigate vulnerabilities.
Step 5: Marketing and Launch
- Create a strong brand identity (logo, tagline, color scheme).
- Utilize digital marketing (SEO, PPC, social media) to reach your target audience. Consider affiliate marketing and partnerships.
- Prepare for launch with a beta testing phase to gather early feedback and ensure smooth operation.
Step 6: Customer Support and Maintenance
- Set up multiple support channels (live chat, email, phone). Ensure they are staffed with knowledgeable and responsive teams.
- Regularlyupdate your VPN clients and server software to address security issues and add new features.
- Monitor user feedback and adjust your services and features accordingly.
Step 7: Compliance and Legalities
- Regularly update your privacy policy and terms of service to comply with new laws and regulations.
- Consider retaining a lawyer with expertise in international cyber laws and business regulations relevant to VPN services.
Step 8: Scaling Your Business
- Gradually add more server locations to improve service speed and availability.
- Develop additional features such as split tunneling, ad-blocking, or cybersecurity tools.
- Explore entering new markets or targeting new user demographics as your business grows.
Option # 2: Partnering With A White Label Provider Like PureWL
Did you find the above option non-viable? Then, partnering with a white-label provider will surely be the right choice for you. Partnering with a white-label provider will provide peace of mind as you will not have to take care of your VPN business’s legal and technological aspects. This approach has several benefits:
- PureWL enables quick launch times by providing a fully functional VPN platform that can be branded as your own. This eliminates the need for extensive development and testing phases, allowing you to focus on marketing and customer acquisition.
- Using PureWL, you avoid the substantial capital investment required for server infrastructure and software development. Operational overheads like server maintenance and network monitoring are handled by PureWL, reducing the need for a large operational team.
- PureWL ensures that the VPN service complies with relevant laws and regulations and maintains high-security standards, reducing legal risks and protecting users’ data.
How can PureWL Help?
PureWL provides a turnkey solution that includes access to a global network of servers, pre-configured VPN software, and tools for managing and monitoring the VPN service. This lets you launch a robust VPN service quickly while maintaining your brand identity.
PureWL offers extensive customization options, allowing you to tailor the appearance and functionality of the VPN service to match your brand and meet specific customer needs. This can include customized apps, user interfaces, and unique features that differentiate your service in the market.
PureWL’s infrastructure is designed to scale seamlessly as your user base grows. You can easily add more server capacity and expand into new regions without worrying about the underlying technical complexities.
Conclusion
In conclusion, starting a VPN business can be highly rewarding, considering the recent market trends, where privacy and security are at the forefront of consumers’ minds. Whether you build your VPN service from scratch or partner with a white-label provider like PureWL, understanding your target audience, complying with legal and regulatory requirements, and investing in robust infrastructure is important.