General Domain Information

Fred Wilson is one of the most well known and successful venture capitalists, and he is currently a partner at Union Square Ventures in New York City. Some of the best known investments his company has made include Foursquare, Etsy, Meetup, Zynga, and Twitter, among many others.

On Wilson’s blog today, he discusses domain names and their importance to a startup. Although a domain name is not on “The 10 Golden Principles for Successful Web Apps” he wrote, he believes it’s something that could be listed.

In the article, Wilson makes an interesting observation about prices of domain names:

“We’ve noticed the average price of a good domain has risen fairly dramatically in the past year. We used to advise companies to spend $10k or less on a domain, then we upped that recommendation to $25k. We recently upped it again to $50k. I suspect domain prices and pre-money valuations of newly launched startups are highly corrrelated <sic>.”

If a startup builds its brand on a confusing domain name, they are actually building value on someone else’s domain name. For instance, when Del.icio.us was launched, it made the already valuable Delicious.com even more valuable (and expensive) due to the lost traffic and likely revenue generation for the previous owner. Had the startup bought Delicious.com earlier, the cost would likely have been significantly less, although it still may have made a big dent in its budget.

For domain owners who own a name coveted by a startup, they should realize that perhaps taking equity in a company is a good idea in addition to the cash. This is especially true when a startup is backed by a guy like Fred Wilson or his team at Union Square Ventures.

Perhaps if more startups are upfront about who they are and what their plans are, domain owners would be more amenable to working out mutually beneficial deals.  In fact, here’s a piece of advice for operators of startup companies looking to get a good domain name without spending a lot of cash up front: telling a domain owner you’re a poor student or a single mom trying to buy a domain name doesn’t work).

Whether you’re a domain investor or you are operating a vc-funded startup, Wilson’s article is a good one to read.

Contrary to what some may think after reading my blog, I don’t really enjoy being in the spotlight. I like being able to help others, and since I became serious about domain investing relatively late, I think I can provide some helpful insight that might be beneficial.

I met Mike Cyger at DomainFest and enjoyed our conversation. I’ve been following what he has been doing on Domain Sherpa, and I think the information he is sharing is especially helpful to people who are looking to learn about the domain industry and know how to successfully invest in domain names.

Mike asked me to do a video interview with him and I agreed. The interview is now posted on DomainSherpa.com. I think he and I covered quite a bit of ground, and I hope I was able to answer some of your questions. I appreciate Mike’s interest in interviewing me, and I hope it’s helpful to you.

Unfortunately, Lucy will not be able to answer any follow up questions.

I saw a well-writen article about domain names on The Business Insider today, and I want to share it with you. The article is titled, “Why $10,000 For A Domain Name Is Still Cheap,” and it was written by marketer and domain investor/advisor, Alan Dunn.

Dunn provided strong arguments for paying a significant sum of money for the right domain name. He dispels two common arguments about why domain names shouldn’t be worth a lot of money – some people hesitate paying a great deal of money when the domain owners were able to acquire them cheaply, and that some people believe a domain name isn’t actually a valuable item.  Dunn’s real world comparisons are pretty strong.

To drive the point home (that domain names are cheap) Dunn compared the cost of traditional media like billboards, radio advertising, and mobile advertising to the cost of domain acquisitions. Expensive marketing campaigns can be fleeting, but a domain name can be used indefinitely.

If you haven’t read the article yet, I recommend checking it out. The next time someone balks at purchasing one of your domain names for your asking price, you might want to send them a link to the article.

If you couldn’t watch last night’s episode of Secret Millionaire on ABC featuring Domain Holdings’ John Ferber, it’s embedded above. As you might imagine, it’s quite a moving show, and I think I can speak for most people who know John to say were all proud of what he did.

I posted an interview with John Ferber last week in case you haven’t read it yet. It will give you additional insight into how John earned his fortune and what he’s been doing since becoming wealthy.

Watch the entire video to see how John helped many people in the notorious Skid Row neighborhood in Los Angeles, California.

It irks me sometimes when I hear people refer to domain investors as cybersquatters or other nasty insults. The general impression about what we do seems to all negative, and people assume we monetize trademark domain names, sit on valuable domain names to hold them hostage, and we do other things that are blights on society.

Some of this may be true for some people, but the sad thing is that this behavior is not limited to domain investors. I think a lot of this reputation comes from regular people who happen to own domain names.

Every year during the election season, many political campaigns turn nasty. This happens at every single level of politics – from small local alderman elections to big national campaigns. Inevitably, some dumb politicians (or their lackeys) thinks it’s brilliant to register the domain name (or something similar) with an opponent’s name in it.

They may only be doing it for political gain, but somehow this cyberpirating makes domain investors look bad. Sure, many politicians have slimy reputations themselves, but it doesn’t seem fair that these people get put into the same bucket as domain investors, making us look bad in the process.

Let’s now discuss the perception that domain investors horde good domain names and hold them hostage when some other parties could be using them better. First off, this is complete and utter horse manure. Nobody with any intelligence would say this about someone with undeveloped prime real estate or beachfront property.

What irks me about this perception is that I’ve  tried to buy plenty of domain names from people who registered them 10+ years ago and still haven’t done anything with them. They aren’t domain investors, and many of them aren’t even monetizing these names.

When I make an offer I think is decent, I often get crazy price quotes in reply. Are these people holding domain names hostage? NO! They are capitalists with similar goals as me.

I do realize that there are domain investors who monetize trademark domain names, do nasty things with sensitive domain names, and do hold some domain names hostage. However, I believe that given many circumstances, almost everyone would do the exact same thing, whether they were identifying themselves as domain investors or not.

It’s been a really great day today, and I want to share a bit about why it’s been so good… BTW, it has nothing to do with St. Patty’s Day, although I plan to celebrate later on tonight.

– While writing this morning’s article, I tried to find my friend’s obituary. Sadly, I not only didn’t find his, but I did find his mom’s, who passed away last year. Using information in that obit, I was able to connect with my friend’s sister who lives in Austin, and we had a nice chat over Facebook this morning. First time we ever connected, and I hope it was able to make her feel good.

– The auction for 2 hours of private domain consulting ended today, and the high bid was $700, all of which will be donated to Ronald McDonald House by the bidder. This surpassed my expectations, and I was excited when that bid was made. In addition, over $300 was donated to my RMH fundraising page today… thank you. Almost there!

– This morning I finalized a deal I’ve been working on since December. I was able to buy BikeTours.com, which goes along with a name I already own – BikeTour.com. The reason it was difficult was that the owner had his registrant email @BikeTours.com, which had no hosting, so the email bounced. Since the owner had semi-retired and was spending his time traveling, I had to do quite a bit of research to track him down. Since he has limited Internet access and had never used Escrow.com before, it took a long time to close the deal. I now have the name in my possession. It always feels good to close a deal.

– I have two advertising deals in the works on a couple of different websites, and I had three paid listings for another website today. These might be small deals in the whole scheme of things, but it shows that the sites are working and people want to be a part of them. It’s almost as exciting to get a new sign up as it is to close a big domain deal.

Hope you guys are having a good day today.