In my opinion, the best way to improve your business is to learn how others are achieving success and to learn from mistakes. I’ve learned quite a bit this past year, and I reached out to a number of domain industry colleagues to ask if they’d share one thing that they learned.
Several people responded with in-depth answers, and I hope their knowledge will help you with your business. Please post something you learned in 2011 that might be beneficial to others who read this article.
Charlotte Gilbert, Dobhran Development – I work 60 + hours a week on several domain development projects, and I’m sure most developers work that hard or even harder. Some developers may put in more hours, some may put in a few less. But I don’t really think of it as work because I enjoy what I do. I really have a passion for it. If you’re not passionate about what you do, stop right now and think about what you really want to do.
After going out on my own as an independent web site developer, I learned it is harder to gain customers than initially thought. One of the most important things to remember when I was trying to establish my development business is I must always be looking for clients and ways to get them to work with me. I have also learned not to sell myself or what I do, short. I worked very hard to become educated in this field and I have over 12 years of experience.
One of the largest mistakes I made was keeping my fees low so I would attract a wider audience. I ended up with clients who complained all the time. The end result was working myself to the bone trying to please them (and using up all my profits in the process). By charging a premium price it establishes the seriousness of my stance as a web site developer, It cut the mediocrity of the client base and I continued to provide excellent customer service without sacrificing my standards.
Warren Royal, Bobbleheads.com – The most important thing I have learned is that development should not be the objective of the domain investment life-cycle; rather, it is just an early step in the process. Many of us have purchased a great ecommerce name, and developed a great site, and then waited confidently for the world to beat a path to our door. And then we have been surprised and disappointed when that didn’t happen. I have done this many times myself.
I didn’t understand that the huge majority of the work which is required to build a successful business (especially an ecommerce one) comes AFTER development. In fact, I’ve learned this: You may spend 5% of your time researching and purchasing a domain, 10% developing the site, and 85% building the business.
There are hundreds of things which you must do to source and/or develop products, identify prospects, develop infrastructure and operations capabilities, hire and train staff, develop distribution channels, warehouse your products, develop vendor relationships, market your business, finance your inventory, sell your products, and deliver them to customers. I think it is important to understand this and to plan and allocate time and resources for these critical tasks.
In my experience, these are the things that determine success or failure in an ecommerce business. Of course, having a great name and building a great site are important – but development should not be the end-game. If success is to be achieved, domain development is an important, but early, step in the process.
Toby Clements, TobyClements.com – The one thing I will remember about 2011 is the feeling that everything leveled back out again. Since 2009 things have been a little sluggish, but this year has been very consistant. There are normally peaks and valleys with sales, but I found myself closing deals on such a regular basis that it’s just an expected part of my day.
Paul Goldstone, iGoldrush – After 15 years in the business I learned the same in 2011 as I learned in every year prior – expect change! The most significant change in the domain industry over the past year was of course the dramatic loss of parking revenue and the switching of gears to web site development. Change is progress, change is opportunity, and change is inevitable, so my advice is to expect it, accept it, and roll with it. In some cases change can be devastating to a company which is why I have always considered diversification an important factor in a well balanced business plan. There’s a lot to be said about being focused but it’s important to have multiple fires burning because you never know when someone might walk up and pee on one of your fires.
Bill Sweetman, YummyNames – I learned that “development” — even so-called mass development solutions — can be a huge distraction from (and impediment to) domain sales efforts as well as a massive time suck. If you have a large portfolio you may be better off just parking everything.
Brian Gilbert, Innovation HQ – One thing we’ve learned in 2011 is that development definitely works if you’ve got the right plan, resources, and PATIENCE. Our developed domains have increased by huge percentage points across the board. This not only increases their value, it keeps us at lower risk since we don’t have all of our eggs in one basket (parking). A major part of our 2012 plan is to continue development.
The Honorable Neil Brown QC, UDRP Arbitrator and Mediator – I have learned, although I knew it before, that in the arbitration of domain name disputes, cases are won on the evidence. Assertions of what happened are not enough; what is needed is evidence of what happened and its significance. The UDRP makes it clear that the issues that the Complainant has to prove are factual, that they must be proved if the Complainant is to be successful and that they can only be proved by evidence.
Moreover, as these proceedings are civil proceedings they must be won on the balance of probabilities. That in itself means there must be evidence of factual matters that tilts the scales one way or the other so that tribunal can conclude that one version of the facts is probably what happened. So practitioners should always remember , whether they are acting for a complainant or a respondent that their case will be won- or lost- depending on the evidence, the quality of the evidence and how it can help the tribunal to come to one conclusion or another.
Eric Borgos, Impulse Communications, Inc. – I learned that it takes a lot of work nowadays to buy a big domain name and develop it into a site that gets ranked well in Google. Instead, I can make the same amount of money buying a domain and flipping it, and that involves very little work. So, I plan to decrease my domain development and increase my domain speculation.
Larry Erlich – DomainRegistry.com Inc. – All those spam emails that we all get from China and elsewhere? Well this year was the year that I took them seriously and actually made money by not leaving any stone unturned. In addition to selling them domains which they inquired about I have sold other domains by responding with a short email with some other names that I have available. I never did this in the past feeling that I could always identify the “real” buyers.
By the way by spam emails I don’t mean ones that are inquiring about a single domain and hiding an identity. I mean ones that are mailing out to every owner of a 3 letter or 4 letter domain. (So I get multiple ones frequently.) They are buyers. Ok so not end user pricing but still pricing I would accept. Like Glenn Gary, always be “selling”. Every inquiry is an opportunity to sell something. The premium domain they inquire about that they will never buy because of the price? Find a domain that they will buy instead.
The other thing I realized in 2011 was the following: We all get annoyed with people who “waste our time” with inquiries and don’t turn out to be the buyers that will pay the big dollars. We’ve all had these. Someone from a medium or big company that makes an inquiry that we feel could result in big dollars. They then write back and say the amount is way to high and have a nice day (or don’t write back at all). So we get pissed off.
I finally realized that in this case that we are not mad at them we are just disappointed that we got our hopes up that we could be making big dollars and that didn’t happen. Because every email we get could be the big one. And when it’s not the big one we tend to react negatively to the person sending the email as if it’s their fault that they aren’t clued into our way of thinking. We take our anger out on them when we are really made at ourselves for getting our hopes up.
Braden Pollock, Legal Brand Marketing – We’re far too dependent on Google, in a variety of ways.
Elliot Noss, CEO Tucows – 2011 reinforced for me the importance of pricing. So many people overprice, but just as many underprice. There is no price elasticity in domain names. It is all about finding the right buyer at the right time which means the focus need be on distribution and pricing “properly” which is art not science. Maximize total revenue, not average revenue!
Karen J. Bernstein, Law Offices of Karen J. Bernstein, LLC – I’ve learned in 2011 that the Anticybersquatting Protection Act and the federal trademark laws need to be changed to make it harder for unscrupulous companies to sue unwitting domainers. The standard needs to be raised for granting injunctions in ACPA and trademark infringement cases when domain names are involved. Indeed, if domainers don’t have the money to defend themselves they may face a default judgment attaching their homes and other large investments or just be financially run into the ground and bankrupt because the plaintiff companies will litigate them to death.
Large portfolio domainers can be sued by any company that has the money to bring them to court no matter how frivolous the lawsuit can be. In 2011, my firm successfully defended a large portfolio domainer that was the subject of a restraining order by a company for being an apparel counterfeiter when indeed the domainer had never been in the apparel business. All the company wanted was the domain name and they counted on the domainer defaulting on the judgment. It didn’t happen. The case has since been dismissed and a motion for sanctions has been filed on behalf of the domainer asking for the company to pay $96,000 in attorneys’ fees. That motion is still pending.
Kathy Nielsen, Sedo (These are Kathy’s personal views, not necessarily Sedo’s) – I learned that buyers by far prefer to buy domains that are priced. The Buy Now (Fix Priced) domain sales continue to grow at a very strong pace on Sedo’s network and feedback from buyers supports this buying preference. They want to buy things now, not 1 month from now. They don’t want to haggle in negotiations that make no sense to them or reflect their normal buying practices. They are used to registering a domain, and want to buy a premium domain as easily as registering a new domain. Price will always be a factor, but the chances of someone buying that domain are greatly reduced if the domains don’t have a price.
Fred Mercaldo, Cities Planet – Everything takes twice as long as you think it will, and revenue is half as much as you expect!!!