Advice From the Most Successful Domain Owners of All Time – Part 1
I will start out by saying that this is probably going to be the most beneficial series of posts you will ever read on my blog, and I had virtually nothing to do with the content.
Over the past several years, I have had the opportunity to meet with and learn from some of the most successful domain investors, domain developers, domain monetizers, and others involved in the domain industry. Recently, I reached out to many of my friends and colleagues, and I asked them for one piece of advice they would give to a part-time domain investor looking to build his business. I believe there are quite a few people who are part time domain investors, and I also believe just about anyone involved in the industry can apply some of this advice to their own business models.
To my amazement, I received nearly 50 responses, and instead of posting them all in one HUGE post, I am going to divide it into 5 parts. With the assistance of WordPress, I have scheduled these to be posted at around 1pm every business day for the next 5 days. I will also create a downloadable pdf (at no cost) once they’re all posted to allow you to have this great advice at your fingertips in one place.
I really appreciate all of the contributions from the industry leaders who contributed, and I hope the advice contained within is helpful to you now – or will be helpful to the growth of your business in the future. As an FYI, I intentionally did not put these posts in any particular order.
Frank Schilling, Name Administration:
I clearly remember walking to the grocery store in the rain, years ago with my wife, doing some fingertip-math, coming to the realization that if I kept repeating what I was doing, I would soon be making $75,000 a month selling traffic. Three times what I was making at the time. I had acquaintances back then, also in this business, who are gone today. They sold out, capped out, got sidetracked by sideshows and shopping and booze and drama. They could have done the exact same thing, but they lost their focus.
You need to keep envisioning that goal, that thing you want to attain and strive for, the next deal, the next acquisition or pick-up. If you can dream it, you can do it. In tandem with that, but no less important I also remember getting that first big name. I got it on a drop. In today’s environment, whether you buy it undervalued, or trade for it or even pick it up on a fluke is irrelevant. It wasn’t even that valuable a name in retrospect, but it was priceless at the time because I believed it was valuable. I thought I could build a business to live off this one name. It was one of those names that made me “feel” rich: “Don’t you know what I’ve got here?!? This is like the best name on Earth! I could sell it to anyone with one phone call for $100,000 easy!!”.
Okay, well maybe I was wrong. It was alright, but not that great. But it felt great at the time and it gave me courage, and enthusiasm to ‘focus’ on the next deal. Keep that enthusiasm for whatever it is you’re doing, because the truth is YOU’RE RIGHT if you believe you are, and that enthusiasm will keep you focused on moving forward to find the next transaction, deal or acquisition.
Most of the successful people I’ve met (in any field) allow this simple piston-engine like chain reaction to happen in their lives. Allow it into yours and you’re unstoppable.
Merlin Kauffman, True Magic, LLC:
Take a bigger risk instead of a lot of small ones. By this, I mean that instead of buying ten domains worth $100 each, buy 2 domains worth $500 each, or 1 domain worth $1,000. Bigger risks usually have bigger rewards.
Monte Cahn, Moniker:
My advice would be to look for a diversified approach. By this I mean, to look for names that have good meaning that are brandible as well as names that generate a revenue stream. Look also to use the domains in different ways, some for parking, some for micro sites, some for affiliate networking and lead generation. As everyone knows, some domains generate more money just parked…just like billboards sit usually on undesirable pieces of real estate but make more money showing ads. Some are better for full fledge deep content websites, however that requires commitment and work to maintain, and to improve. Working with affiliates offers some additional options as you can steer traffic to CPA or lead generation sites that pay based on conversion, sign ups, or even CPC.
Always look to sell domains for decent multiples. Most domainers look at a domain sale where you make 20% – 100% profit as not worth their time. If you buy a domain for $59 and sell it for $120, you just doubled your money…I do not see that happening in any industry right now. So take money off the table and diversify that money into other types of investments….do not hold everything, look to sell when there is good profit, try to retain a piece of the upside where ever you can. For example, if you sell a higher priced domain, you can negotiate in stock, warrants, options, profit sharing, retain percentage of ownership so that if it does become more valuable in the future, you have upside.
Look to do creative financing and lease to own deals. We are seeing more and more lease to purchase, multi month and year domain purchase transactions using our escrow services. This is a great way to buy in and offer others to buy with flexibility rather than all money down all at once.
Work also with a company that is aligned with your interests, secures and protects your domain assets, one that makes money when you do so that they are incented to work harder to help you be successful.
Brett Lewis, Lewis & Hand:
Do the right thing. Don’t build a business on registering trademark domains, because it will get you sued. Some of those guys make money and some of them get sued. Honor your agreements. Don’t sign agreements unless you plan to follow through on them. In other words, do the right thing!!
David Castello, Castello Cities Internet Network:
Domain Investor (non-Developer)
1) Only invest in dotCom or Top 10 ccTLDs until you really know what you’re doing (or usually win at roulette in Vegas).
2) Target names that have high end-user potential (most of them will also have high SEO potential).
3) Do not buy a name simply because you think other domainers will want it. Most of them are broke anyway
4) Read DNJournal.com’s weekly sales report.
1) Only invest in dotCom or a ccTLD (if your business is based that country). Yes, you can possibly make money with dotTV, dotME or DotCM, but I don’t believe in working ten times as hard for the same revenue. Furthermore, dotTV does not stand for television, dotME is not about you and dotCM is not typosquatter heaven. They are the ccTLDs for Tuvalu, Montenegro and Cameroon – and if you think that will never matter down the road think again.
2) Target names that also have direct navigation and built in SEO potential. Steer clear of catchy names with no meaning (for more insight into this read about most IPOs from 1999-2000 – for every Pets.com there were a hundred more you can’t remember because the names didn’t mean anything to begin with).
3) Learn WordPress or Dreamweaver (or you’ll end up working and taking direction from your webmaster instead of the other way around).
4) Read DNJournal.com’s weekly sales report and every other blog out there by a Domainer/Developer (like Elliot’s Blog).
Mike Mann, Grassroots.org:
Do extensive research on each investment, use all the technology available, invest a lot.
Adam Strong, Domain Name News:
ALWAYS SHOW UP TO THE AUCTIONS
If you don’t go/attend/watch you may miss out on a great deal. I’ve been to many auctions and scored a deal I wasn’t expecting to get. I either thought the domain was going to go higher or had a higher reserve. I may have not seen the possibilities behind the domain until that day or known about some of the revenue/traffic/potential of the domain until that day. Auctioneers lower prices mid-auction now. At live events auctioneers are now giving insights in to the domain you might not have known. . . traffic, revenue, etc. New domain inventory gets added last minute. There’s all sorts of reasons to show up. I see it on the forums all the time . I hear it from my colleagues all the time. . . “WOW that was a steal ! I wish I’d have been bidding ”
I’ve been going to auctions outside the domain realm for over 20 years and the same thing applies. . . you just never know what’s going to happen until you show up for the auction.
Chad Wright, WebQuest.com, Inc:
Find out who makes the big money in this business, then copy them.
Rob Sequin, RobSequin.com:
If I had one piece of advice to offer a part time domain investor I would suggest that you know the difference between investing and speculating:
* Purchase quality domains from a trusted source
* Purchase .com domains (with some exceptions)
* Buy and hold with plans to develop
* Buy and hold domains that have natural type in traffic
* Hand registering quantities of domains based on a longer term investment strategy.
* Buying non .com domains (with some exceptions)
* Any traffic or revenue would be a bonus
* Fine if you plan to simply sell domain names
* Fine if you plan to develop a domain or domains to cover a niche you know and like.
Either way, I would suggest that you focus on keywords or industries that interest you.
Andy Botzer, LZ Domains:
Be remarkable. That’s it. In anything you say or do keep that your mantra.