Introducing Flippa’s Crowd-Sourced Domain Appraisal Tool http://t.co/502RZh7TNq
— Flippa (@Flippa) April 7, 2014
In a blog post yesterday afternoon, domain and website auction platform Flippa announced the launch of a new domain appraisal tool that uses crowdsourcing to get its domain name valuations. Flippa users are encouraged to provide their appraisals of submitted domain names, and there are incentives for participation including listing upgrades and account credits. The idea is that the valuation can be seen as more accurate when a large group of people provide their opinions.
Although I like the concept and think people may be able to get an idea about whether or not their domain name is worth something, I think it’s tough to get reliable appraisals from people who may not have domain valuation or sales expertise.
One issue is the incentive that is given to participants. Obviously, Flippa needs to reward people for the time they spend giving appraisals, or the concept probably wouldn’t work. On the other hand, if participants are racing through appraisals without looking at metrics, comparables, or other information that would go into an appraisal, I don’t know how it can be all that accurate. Sure, a “gut feel” is what experts use to give a very broad valuation, but I don’t know how many experts will be participating.
All of that said, I still like the concept. When used in conjunction with other free domain appraisals, the owner of a domain name can get an idea about whether his domain name is worth a premium. For example, if the crowdsourced Flippa appraisal says it’s worth $200 and Estibot says it’s worth $0, the owner should probably not expect to make much from a sale and may even opt to drop the domain name in the future.
Personally, I would rather run a name by someone like Adam Strong or Andrew Rosener rather than seeing what 50 random people think about a domain name, but the tool could be a good way to gauge whether it would be worthwhile to list a domain name for sale on Flippa.
This remember me the defunct GroupValuation.com created in 2009 by Craig Rowe (DomainApps.com).
Watch the screenshot:
And here the announcement:
What happend is everybody were submitting appraisals obtained for FREE from Valuate.com or Estibot.com to get usage credits. But sometimes it was even worst, people were submitting fake appraisals to profit as sellers or buyers.
The result is the tool became quickly uselless and was closed.
I think if it is done well, it could be helpful. Sellers have an incentive to give high appraisals and buyers have an incentive to give low appraisals. So any crowd sourced tool should have restrictions built-in such as allowing only one appraisal on a name per IP address, etc. Anything that can build at least some integrity into the system should be used. Perhaps a person should be forced to view certain traffic metrics on a name before giving an estimate.
If a company such as Flippa thinks that they can really ramp up their domain sales business, then I think they should even consider paying people like you something for giving their appraisals. Obviously, people like you and major brokers are too busy to spend much time on this, but if Flippa paid a team of say 10 experts a small amount for appraising a small group of featured names each month, the experts could use such a forum for their own benefit by being recognized as an expert in the field, and Flippa could really build something more respectable than is currently out there. You mentioned Adam Strong and Andrew Rosener, who are clearly two of the biggest experts in the industry. If there were a group that included people like you, Adam, and Andrew appraising a small group of featured domains each month on a site like Flippa, it might benefit everybody and be a very good thing for the industry. I would love to see this happen.
I found this interesting, as I had recently read an article shared by Phil Corwin, about crowd-sourcing intelligence for the CIA with something called the “Good Judgment Project”(Article here: http://www.npr.org/blogs/parallels/2014/04/02/297839429/-so-you-think-youre-smarter-than-a-cia-agent).
Remarkably, the wisdom of crowds, according to the article, was a concept first discovered by a British mathematician in 1906, who found that the crowd at a county fair was able to accurately, as a group, guess the weight of a dead ox.
I suppose with a dead ox, there is a limit about how much it would weigh along with a range… For instance, without knowing anything, I could guess between 150 – 2,000 lbs and probably be close.
Good point; and of course, a domain’s value is generally, what a particular person is actually willing to pay for it… not an empirical value…
Really interesting Elliot, thanks!
I think that you would be really interested in some of the most cutting-edge research that I have come across explaining crowds, open innovation, and citizen science.
And you may also enjoy this blog about the same too:
Powerful stuff, no?
When i’m at the track, I always figure 3,000 people handicapping a
horse will come out with a better odds figure than just me trying to do it.
Recent sales comparables are much more useful than appraisals.
That is true, but many people don’t seem to understand what a comparable is.
I see things like “Well if BitcoinWallet.com sold for $250,000, my domain name, e-bitcoinwallets.us must be worth $x”
Checked a couple of appraisals, and TBH most users over there seem to value names at wholesale prices, if even. Plenty of junk names submitted for appraisal, but even the half-decent ones are getting valuations of $50-$200. Certainly not end-user pricing.
I think the smartest ‘crowdsourced’ appraisal tool is the one on the DNS app; you can ask your buddies for an evaluation of a domain. Unfortunately, the app is only for iPhone owners and thus I cannot ask Elliot. 😀
I have an iPhone, but I don’t really use that tool much.
Thanks or your post Elliot, and for everyone’s comments and feedback. I share a lot of the same sentiments, and am working behind the scenes with our developers and moderators to fine-tune this so it’s amenable and efficient for all involved. Stay tuned…