It has been a while since my last “5 With…” five question interview, and I thought it would be neat to revive this series by interviewing Andrew Rosener, CEO of Media Options.
Andrew runs one of the most successful domain name brokerage firms, and his company has also done very well investing in domain names. When it comes to getting domain name industry observations or feedback about a particular domain name, Andrew is one of the few people I rely on to get honest, first-hand insight. There is probably just a small amount of people regularly working on acquisitions and sales as hard as I am working, and Andrew is definitely in this group.
I asked Andrew several questions about the state of his business and the current state of the domain name aftermarket. Although Andrew shares his thoughts regularly on Domain Sherpa, I think he provided some interesting insight in this interview. I am sure he would be willing to answer more questions if you want to ask in the comment section.
As always, I appreciate Andrew’s time spent answering these questions, especially with his wife Anna’s due date rapidly approaching.
Elliot: What have you and Media Options been up to lately?
Andrew Rosener: Well I personally am expecting my second child any day, maybe any hour! Also been in Europe for the last 6 months as a Zika refugee which has been an experience & challenge. MediaOptions has had a really busy couple of years, but this past year was our best in history.
We brokered a eye popping number of end user sales & acquisitions, unfortunately, as you know, we have a policy against reporting any of our sales and we continue to keep all details confidential. But I am able to mention some of the domain names which have sold without revealing any details of the sale.
We brokered the sale of 116 three letter .com domains (3L.com) in the past 12 months alone. We sold one of the only two possible single character .net domains: Q.net. Media Options was involved in the sale of seven two letter .com domains (2L.com) in the past twelve months, approximately 28 or so in total we think. Could be over 30. But the fun ones are the great brands that we’ve sold: Common.com, Scoop.com, Essential.com, Podium.com, Hop.com, Yup.com, Say.com, Perspective.com, Stuff.com, BigData.com, ReputationManagement.com, Safety.com, Blood.com, SelfieStick.com, VR.net, RE.net, Girlfriend.com, Even.com, Bhang.com, Shrooms.com, Nug.com, HigherEducation.com, Frisco.com, Rochester.com, EatFish.com, Annuity.net, Disrupt.com, Brew.com, ZipLines.com, AmericanWest.com, Strawberry.com, Toil.com, Tantra.com, Pug.com, Boobs.com, Willow.com, Important.com, Tuck.com, ContentMarketing.com, Beard.com, Paragon.com, MostWanted.com, Beth.com, LiveJapan.com, BusinessAnalytics.com, Clearlake.com, Badger.com, Ambassadors.com & Mux.com. There are many more but almost all of these mentioned went to end users.
If we were able to report the sales prices for the list above, I can say that our sales this past 12 months would rank above ALL of the top 20 spots on DNJournal’s Year To Date sales chart. So yeah, we’ve been busy!
Elliot: How has your company changed over the last few years?
Andrew Rosener: Media Options and Andrew Rosener were synonymous for many years. I was the face and work horse of our brokerage business. Now we are a larger team. We have four brokers between us including our Senior Broker Chris Zuiker, who is proving to be a rock star. We have back office and admin support lead by Tess Diaz. I’m just the closer. I’m the guy they bring in for the final inning to take the game home. But I’m very proud to say that my team is really carrying the business these days with my guidance and support. We’ve matured. Media Options isn’t a cowboy operation anymore. Although I’ll be the first to say there was nothing wrong with that, it got us here by slugging it out every day, me and my cowboy hat.
These days our target clients are one of two:
a) premium domain owner with domain value of $50,000 – $xx Million. You want to hand off the ball to the best broker you can and let them do their work, however long that may take. Our average contract is now 6 months and we would like to actually start making our standard brokerage contract (for END USER brokerage) 9-12 months. We are putting in a ton of time, resources and effort to sell our client’s domains. We have a process now that is incredibly effective. In fact we’ve created an entire domain sales lifecycle that we feel optimizes every domain to sell for the best possible price at any given period of time. So we want clients that trust that we will do the best job possible to represent their asset and get it sold and in return are willing to give us the runway we need to feel confident we’ll get it done.
b) venture backed or serial entrepreneur driven startups looking for either a premium domain to build their company on or to upgrade the domain they have been using now that they have hit their growth phase/target. We assist in not just private domain acquisition but the entire naming process. We just recently helped a beverage company in Europe to create a meaningful brand for a new product, acquire the domain name, and create a plan for any other domain names that may be useful to acquire now and at a later stage.
Elliot: What are some domain industry trends you are noticing?
Andrew Rosener: I think one-word brandable .com domains, real tier 1 grade names, are possibly the most undervalued assets on the planet right now. I think we are facing a potential exponential value correction (upward) over the next couple of years on these names. Things like Jet.com, Dragonfly.com, Home.com, PX.com, MJ.com, Box.com, Rain.com, Apple.com, Amazon.com. These types of brands are going extinct! There are only a handful of top domain investors who truly grasp the enterprise value of such a domain. They are quietly sitting and waiting for the World to catch up.
About 40% of our business is domain acquisitions for startups. Everyone wants the same thing! They want a generic one word .com that is general enough for a pivot, easy to spell, shorter the better & has a positive ring to it. Well let me tell you, those are getting real hard to find! Harder to find than a burrito in Rome! If any of the new gTLD’s do catch on with end users, as a company name & brand, not just marketing & advertising campaigns, it will be 100% because we simply run out of amazing .com domains. We’ll see whole companies acquired soon only for their name. Because the domain is more valuable than the business that owns it.
If Jet.com was called Yellow.Online instead, do you think it would have sold to Walmart for $3 Billion?
Elliot: What advice would you offer people who are new to the business and others who want to grow their business?
Andrew Rosener: First thing, don’t knock the hustle! Competition breeds success. This is becoming an incredibly competitive business, both brokerage and domain investment. The number of active players in the market has multiplied in the last 10 years by probably a factor of 100. I actually don’t think that is an exaggeration. I bet we went from 300 – 500 ten years ago to 30,000 – 50,000 today. So you need to hustle, be persistent and forge your reputation as someone who always does what they say they will do. You will thrive if people can trust you. If you can make a deal with your word and a handshake, you will go far.
Elliot: What does it take to be a professional domain broker?
Andrew Rosener: I think its really important to differentiate the types of brokers we have in the domain industry, because consistently people just say “domain broker” as a blanket description, which it shouldn’t be. Regardless of which category you fall under, you need grit, determination, the gift of gab, discipline and a lot of empathy.
You have guys that are focused on the wholesale market, running newsletters, wholesale marketplaces, auctions & just straight up Skype and chat hustlers. These guys are deal makers. This is how I started out. We still run our newsletter and are actually working on some cool ways to better leverage that. Our domain sales newsletter is probably the longest single owner newsletter in the industry (I think that is probably a fair & true statement, no?). Its a good way to start out, more of a trader really. A matchmaker. But it is getting very crowded. You scrape all day long for small margins but do a higher volume of deals to make up for it (they hope). But you build a network, a reputation & trust. Lot of respect here, this is where you cut your teeth and build thick skin.
Then you have sales people, account managers and sales managers that manage inbound leads for client’s domains, or owner operated domains. There is a strong degree of customer service involved primarily. Different organizations call this role something different. Some would say inside sales, some would say customer service and some would say broker. I think the primary differentiation is the compensation package. They manage inbound leads via phone & email, leverage a CMS to persistently manage those leads and negotiate offers which come in. But little or no outbound solicitation and sales. Very little competitive bidding process to get the highest possible price. To me, a broker creates demand. A sales person, makes sales.
Finally you have the broker; who is doing the outbound sales, solicitations, marketing & broad communication. Creating demand out of nothing but relentless persistence, insight and intuition. This is where we are primarily focused these days. I like to say that our job is to create liquidity in an illiquid market. Our sales process is highly structured, intensive & effective. We are building curated hit lists of anywhere from 50 – 200 different qualified buyers for a particular domain. We don’t just email the WHOIS or hold our nose and guess, we identify the appropriate decision maker at each company. Then we go out and hammer the pipeline for months on end in most cases until the right timing emerges with the right buyer; that’s when the magic happens. We are dialing for dollars and sending emails all day long. I believe Chris sends 200 – 300 emails per day. I used to do 500 points of contact per day (phone and emails) when i first started out. Now we have built a steady pipeline and we are able to plug in premium domains into our domain sales life cycle consistently and effectively.
One thing I will say that is critical to starting out as an independent domain broker is exclusivity. If you aren’t getting an exclusive right to sell a particular domain then you shouldn’t be marketing it for sale. That is my opinion. It creates chaos. Mixed messages. It harms the value of a domain name to have multiple people soliciting buyers for it, potentially at different prices and with different stories attached. This has lead to many UDRP’s for unknowing owners as well. Including us! Someone was trying to broker our wi.com domain without our permission. They contacted a trademark holder and instigated him, which lead to him filing a UDRP against us for wi.com. This not only cost us thousands to defend, but put a 7 figure asset at unnecessary risk of loss. Is that someone you’d want handling your valuable assets?
Bonus Question – Elliot: What are you seeing in the new gTLD aftermarket space and what are your short term predictions for selling new gTLD domain names?
Andrew Rosener: I have to say that we have had very little action in the gTLD space aside from acquisitions for clients directly from the registry in most cases. We have acquired some interesting new gTLD domains for ourselves, but primarily either defensively or just for speculation. But on the brokerage side and especially the end user side, I actually couldn’t tell you any sales we have made. I think we have a few actually but none come to mind immediately.
The good gTLD domains that I would be interested in trying to broker are not priced realistically in my opinion. I think pricing is the greatest flaw to the whole program. Pricing should be standardized. If professional domain brokers like myself are confused by pricing, how do you think consumers feel? How about the guy trying to manage a companies domain portfolio to protect their IP? Its a mess.
My short term prediction is that it will become more of a mess before it gets better. I think that 5 years from now great and memorable new gTLD domains will have value, less than .com of course, but value, just like any great and memorable domain name does. There will be some degree of liquidity and some degree of wide consumer recognition. But only the real cherry stuff is worthy of any investment because the premise of the whole thing is to eliminate scarcity. Eliminate scarcity and you have no resale value because your domain is only as valuable or as good as the next best alternative. The difference in value between Common.Online and Common.Web is negligible. But the difference in value between Common.com and either of those two is light years apart.
Thousands of companies and investors will try to get a new gTLD extension in the 2020 round. Probably 10X or more of who applied in the last round. But at the consumer level I think .com is where to be if you want to be.