Most of Us Missed The Boat… Again

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Over the years, I’ve heard people say things like, “I wish I knew about domain names back in the 1990s. I would have bought some of the best names and sold them for a lot of money.” For some reason, people think that they had to be knowledgeable about domain names back in the 1990s or even early 2000s to make FU money. This is BS.

If you are at your computer reading this on a nice Friday before Memorial Day weekend, you are probably like me and missed the boat in the 1990s and as recently as a few years ago. I never look back regretfully at the 1990s, but I do feel like I missed the boat with numerics and short .com domain names.

I have owned and sold quite a few numeric and three letter .com domain names. I made a decent profit on them even. However, had I been more aggressive in my acquisition efforts a few years ago, I probably would have earned enough money on sales to be able to retire or at least scale back considerably on my work.

Some numeric domain names that were sold for $500-$1,000 just a few years ago are selling for $8,000 – $15,000 +- on a regular basis. Some domain names that sold for $10,000 – $25,000 a few years ago are selling for six figures +- on a regular basis. Some of the better names that would have been in the mid five to low six figures a few years ago are now selling for high six and low seven figures +/-.

Put into real terms, had I spent $250,000 – $500,000 on a portfolio of numeric domain names just a few years ago, I likely could have sold those for $5 million +/- at today’s price levels. For most professionals in this business, spending $250-500k on domain names is very do-able. It’s not like we’re talking about tens or hundreds of millions of dollars that most of us don’t have available to us on a moment’s notice. $500k is substantial, but it’s not like we are lamenting about home sales in New York City in the 1960s without considering inflation, average wages, and other factors that make prices seem so cheap.

The numeric .com domain name market exploded right in front of our eyes, and there aren’t all that many people who made a killing on them. Yes, there are many who made good profits. Heck, I made some great ROIs on private deals, but none of those were really business altering.

I would rather look forward than look backwards, but most of us missed the boat.

1 COMMENT

    • LOL… have you visited this blog before?

      I still own fewer than 10, including TeamSilver.Rocks, Elliot.Link, ElliotSilver.Link, Silver.Ventures and a handful of others. I think I only have 2-3 that I would consider investments, like n.Ventures and n.Holdings.

      I don’t think new gTLD domain names are good *investments* for people like myself. I would rather buy them in X years if/when there is a proven aftermarket. I can make much more money on .com domain investments. Here are some of my company’s domain names: http://www.topnotchdomains.com/investments.html You’ll notice they’re all .com.

  1. On the assumption you didn’t have that half a million in ready cash, say in year 2000, would you have been able to get an unsecured loan on that amount of capital?

    Are the new gtlds the new boat to jump aboard?? If not, what is?

    John

    • I was still in college in 2000, so I personally didn’t have that amount available to spend on domain names. I would not have had the stones to ask to borrow that money from anyone either, and I am quite sure when the .com bubble was bursting, nobody would have given $500k unsecured.

      No, I definitely am not investing in the new gTLD domain names (see above comment).

      I find it ironic that many people complain about not investing in domain names in the 1990s but they could have easily done that in the 2010s and made many millions of dollars with just $500k (myself included).

    • most people in the domain industry don’t have access to 500k cash or anything like that. sure there is the top 1% maybe..heck i wish i had an extra 25k back in 2007 so i could of bought a LL.com i had someone wanting to sell me. i would venture to say most domainers are cash poor and have their money tied up in domains.

    • Maybe not $500,000, but $100,000 yes. I think anyone that is in ANY kind of business could pool together $100K. And, as Elliot was hinting, you could have done some damage with $100K just 2 or 3 years ago. You could have bought an LL dot com two years ago at $100K and it would be worth a minimum of $500K today.

    • Even $10k or $20k. You couldn’t have bought with that amount and made a killing. My point is that turning $250-$500k into $5 – $10 million is business altering, IMO. Turning $20k into $200-400k is nice but wouldn’t change my business or business strategy. Having $10 million in the bank would change the way I operate my business.

    • I agree. You’re referring to life changing amounts. And yes, people are all in different places, but I agree that getting $100K should be “doable” for someone in business.

    • I have never tried to get a loan to buy domains but will say even getting a mortgage was difficult as they view someone running their own business as a risk. i put all my money into domains so if i had to come up with 100k i’d either have to get a loan or sell a few of my best names. neither of which sound like a great idea.

  2. Couldn’t you have written something a little more cheery as we head into the big holiday weekend that starts summer? 🙂

    Have a great Memorial Day Weekend, Elliot, and all. I’ll try not to spend too much time this weekend thinking how I missed the boat on all these opportunities and how I’m sure to miss plenty more.

  3. “had I spent $250,000 – $500,000 on a portfolio of numeric domain names just a few years ago, I likely could have sold those for $5 million +/- at today’s price levels.”

    or you could have lost $250,000-$500,000 when numerics tanked because of the new gTLDs. Obviously that didn’t happen but it could have and then this conversation would be much different. You just never know what will make money and what won’t.

    • Absolutely. Hindsight is 20/20.

      When 3n .com names were low 5 figures, I thought they were expensive. Someone could spend $5m today and make a ton of money in a few years… or they could lose it all. I am certainly not buying numeric domain names at today’s prices, but there are people who are doing it.

  4. It’s always hard to predict when irrational behavior will start. And yes, this panic to go out and locate every random 4 or 5 letter .com name is irrational. It’s understandable why the LL’s have skyrocketed, many saw that coming. There are only 676 total combinations and most are in use by major corporations. The overflow to 5 number .com’s, 3 letter .nets, two number .cc’s, etc. is really not rational.
    People try to justify the reasons why the LLLL .com names or NNNNN .com names are increasing in value – but none of it is accurate. It is just an overflow from the LL .com names increasing in value — which have been inflated way to quickly in my opinion — and that’s coming from someone who has owned, sold and still owns LL .com names. Investor speculation is driving this, not a corporate awakening to the benefits of owning extremely short .com names.

    Just my two cents.
    When something all of a sudden explodes in value, there will be a crazed frenzy by buyers and there will be hundreds of people lined up trying to rationalize the explosion. With other assets (real estate, stock markets, etc.) this is a dangerous situation.
    Take my opinion as you would. It’s just my opinion.
    Again, it is coming from someone who is profiting from the boom — with personal sales, auctions and brokerage.

    Aron

    • The LL .com market isn’t really pushing ‘down’ hard on LLL .com, as the two markets are very separate. LL’s going to companies and hedge funds, and LLL’s going to investors mostly. Very few corporate buyers switch to LLL .com if the price is affordable per their standards. The LLL’s have taken off solely on speculation as it exists in the Chinese domain market. The latter, is due for a correction, as is the entire Chinese economy. When that happens, it won’t be nice. Remove the XJQ’s etc. from the equation and you end up with ‘regular’ prices.

    • The latter, is due for a correction, as is the entire Chinese economy. When that happens, it won’t be nice.

      This! 😀

      For anyone that follows what’s going on in their economy — it’s likely going to get crazy soon.

  5. Lots of boats missed. A $1000 investment into Bitcoin a few years ago could have been sold for 8 figures a year ago. Ironically there are probably a good number of drug dealers and drug buyers who forgot they held Bitcoin and became very rich. Right place, right time.

  6. I have been thinking and speaking to my missus about this exact topic.

    Domains that I saw around 2009-2012 that would have 50 registered bidders on Namejet, none of whom went over about a couple of hundred dollars, now have 100 who drive the price up to thousands.

    I also would see 3 letter .coms with “bad letters” being sold for at least 5X less than today.

    In life you have to learn from your experiences. I have now lived through two recessions and on both occasions I was not in a position to take advantage of the fact that they are when amazing opportunity is presented.

    At the bottom of the market the house I lived in, in London, could be bought for £250,000. As of checking today, the same houses are selling for £425,000.

    The next time there is blood on the streets I shall be doing the cutting.

  7. Like F Schilling says, history doesn’t repeat itself but it sometimes it rhymes. Things are cyclical. Even in the domain world. One and two worders that are meaningful are always in. So are the short numerics and LLL’s. Right now the EMD’s are a bit on the outs and they might be a huge buying opportunity right now for them. We will see in a few years if they come back.

  8. Not much I can do about the past, however I am getting all geared up to do something about the future. Hopefully I won’t miss the next boat. Though, there’s still money to be made in the numeric markets, it’s not over yet and the doors still wide open.

  9. When I started heavily buying domains in 1997 I charged them all to my credit card. Back then they were $35/year from Network Solutions, which was (and maybe still is) one of the worst companies ever to deal with.

    I totally missed the boat both then and more recently on
    numeric and three letter domains. I never bought any, and had no idea at all they would ever be worth so much. I still don’t really understand it.

    • Yeah I missed the boat on LLL’s too. I remember way back on Domainstate, Afternic and GreatDomains chats, when there was all this chatter buying LLL’s. I thought ‘why’, they don’t mean anything. EMDs related to a product/service seemed to make more sense to me. So I avoided LLLs. In fact at one buying session, I had DBA.com in my cart, and thought ‘why’ for $100?? The scarcity and limitedness of them didn’t sink in then. 🙁

      ..and the band played on!

    • Once a year it is fun and miserable to go back to the “remember how dumb I was” topic.

      1997, way ahead of the curve and I registered 100+ domains as a 23 year old to my credit card. Of course, only about 5 of them were good generics, the rest of them were ProductXForSale.com, ProductYForSale.com – sold some of them along the way but boy could things have been different….can’t complain though – only look forward.

  10. I too cannot get over the stupid prices that are being paid for random LLLL.com’s today. I totally missed that boat and could have registered a nice variety of CVCV names and such. Could have made a lot of money, but this just reminds me that there are other good opportunities out there if a person uses good judgement and has a little foresight. Of course almost anything can be a gamble. If anything I feel that the prices and general desirability of some of these random short names should be encouraging to domainers and domain values looking into the future!

  11. Easy to wring the hands?

    What’s next?

    I suggest single-character IDN (Chinese .com)
    When hordes attack, it’s too late…

  12. I did invest in some nice LLLL, some of them all consonants without “V.”

    I also invested in some decent pronounceable LLLL.

    Probably 20-25 total.

    Back in 2012, one could pick off good LLLL for Go Daddy BIN.

    I have at least 2 NNNNN without “4,” both bought at BIN.

    For now, I’m holding; these are going nowhere but up.

  13. Thank you for another great read Elliot !

    I’ve bookmarked this so in a couple of years to 5 i can re-read it hopefully to know if investing in new gtld’s was a mistake or my gutfeeling was right. It’s funny to see also the Domain King himself buying over a 1000 new gtlds despite believing in .com forever.

  14. I didn’t even know there was a boat there although I was working in the IT industry back then. Now I want to spend time looking for the next boat that will arrive in a few years.

  15. Having myself owned a fair share of LL.com and a NN.com at times and having sold them all for healthy profits up until a few years ago I too had this moment Elliot. Gosh if I held them I would have made X more but what I was able to do was use those profits and make more by reinvesting again so honestly I didn’t miss out on a dime. I think if you consider your flips and reinvestments back into names E you will find we didn’t miss out on much. We worked with what we had, reinvested and are still working.

    Throwing $500k into a “maybe” is not something people with less than several million do normally. We both had just started families and I can only imagine rolling over in bed and telling my new wife, hey babe $500k wrapped up in NNNN so cross your fingers LOL

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