One of the best domain names in auction at GoDaddy Auctions is Userbase.com. Despite the $7,234 (automated) GoDaddy appraisal for Userbase.com, the auction already has a high bid of $33,500 with a little more than 4 hours remaining as of the time of publication. I think it’s a great domain name and would be a solid upgrade for quite a few companies and businesses that user the Userbase or User Base branding.
One such company operates on the Userbase.dev domain name. In a Twitter thread last night, Userbase founder Daniel Vassallo asked for opinions about whether or not he should bid on the auction, which already had a high bid of $33,500:
— Daniel Vassallo (@dvassallo) January 3, 2020
There is quite a bit of advice from various people with and without domain name experience. On one hand, this name could sell for $50,000 or more, and that money might be better spent building the (still small) business. On the other hand, if the domain name sells for this much money, it will become much more difficult to acquire in the future – if not impossible. There might be another company called Userbase bidding on the domain name. Even if it is an investor who is bidding, the retail price of this domain name will be much higher to ensure an adequate return.
In my opinion, it is difficult to offer helpful advice about this to Daniel without knowing important details about his business and the startup’s industry or trajectory.
On one hand, the money may be better spent on growing the business now, and when the timing is right – the company is making more money or has serious funding – the domain name could become an acquisition target. Put simply, $50k+/- cash (or whatever it sells for) might be more important to the company than $250k or $500k is in 2 years.
On the other hand, this domain name already has substantial “burn down value” and it should retain its value should the startup fail and the owner opts to re-sell it when winding down the business.
One thing Daniel might want to do if he doesn’t have adequate cash reserves to fund the purchase and the business is to reach out to a third party domain name company like Domain Capital (an advertiser) to help finance the purchase. Maybe even a domain investor who sees value in the domain name would purchase it and do some sort of lease with a future purchase option (allow myself to introduce myself!)
For what it’s worth, Daniel’s poll closed already and 69% of the 915 people who voted chose “no.” What do you think?
Update: It looks like Userbase will be moving to Userbase.com after the winning bidder reportedly defaulted.