Advice From the Most Successful Domain Owners of All Time – Part 5
This is part five of a series of five with one piece of advice from some of the most successful domain investors, domain developers, domain monetizers, and others involved in the domain industry. 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.
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.
Rick Latona, Rick Latona, LLC:
When I first got in the business I was a bit schizophrenic, dumping money into every venture I thought had a chance at success. I registered thousands of names, bought high-end names, sold some names cheap, held out for big money on others, started a loan company and eventually started the newsletter and auction company. It worked, only because I dumped so much cash into it. Something was bound to stick.
If I had to do it again and do it on a tight budget, it would be much different. Far too many of the things I tried failed; enough to make a grown man cry from the loss of capital. My lessons and the lessons that others are sharing in your series can help people avoid those pitfalls. You don’t have to make the same mistakes.
If I had to pick one thing, and one thing only, I’d say choose not only the battles worth winning but the battle you can win. If you think you have an idea or a line on a name you could purchase that could make a huge return, think hard on exactly what your plan is to see the light in the end. Can you win the battle? Or is it more likely you’ll be stuck in the name for a long time with no capital to develop it and no one to sell it to.
I’ve been stuck with far more assets than I care to think about. Big money is made when you can rotate your capital rapidly. It’s not enough to just buy low and sell high. You have to do it a lot. The faster you can turn the money the more money you’ll end up with at the end of a year.
People often underestimate the time-value of money. Understanding this simple theory can help you know when you are better to take an offer today or hold out for a bigger offer tomorrow. Often the bigger offer tomorrow isn’t more money at all when the time is factored into the equation.
You’ve got to know you can win the battle and win the battle in a reasonable amount of time. Have a back-up plan if you can’t. For example, these days, I rarely buy names I’m not willing to own and develop if I’m unable to flip them. I think about my father not buying land unless he can sell the timber on it to make the mortgage payment in the rare case he can’t flip the land to a developer. It’s the same thing.
Most of the names I’m stuck with are names that don’t have a clear business model to them and can’t be easily developed. I bought them just because I thought I could flip them, didn’t flip them, now its tied up capital that gets more expensive every day I hold onto them due to the time value of money.
All domainers who want to know more on this should read this book (I’ve memorized every formula inside).
Skip Hoagland, DomainsNewMedia.Com LLC:
My advice for this person would be to try and put their asset in the right hands of someone who is in this business full time and has the ability to develop what their domain represents. I would either lease the name, or sign a management agreement with this company. I would offer them 70% of all revenues after a certain gross revenue number based on your domain name business model potential and 100% of the first revenues up to a certain number agin based on your domain revenue potential. By working on a Gross number versus net everyone is protected. Like the internet this is a new and better way of doing business.
What I would not do is a PPC site which has no upside. If you can not run a real business around your domain full time or find someone to develop and run it for you, I would sell the asset and hopefully you will make a nice profit by doing so. So many people out there own great names with great potential, but they are simply going nowhere and destroying the name and making the Google Guys much richer by not fully developing what they have.
All it takes is one good domain.
The rest will follow.
Today, our domain space has become increasingly cluttered with domain litter…useless extensions and obscure country codes that blow around in the wind like trash in a vacant lot… followed by domain investors running wildly around chasing all this garbage.
Don’t chase the litter. Don’t buy the garbage.
Stay focused. Save your money and wait. The moment to grap one good dot com domain has arrived.
You can thank the worst recession in our country’s history for this remarkable opportunity.
I would rather own one good dot com for $100,000. than a large portfolio filled with useless extensions.
Size means nothing in this market. Only quality matters.
When I look back to my early years in this industry – back to 1996 -when the domain stone age was unfolding and just a few dinosaur domainers were roaming around the earth buying domains and bitching about Network Solutions –
Even then, the mantra was always the same.
All it takes is one good domain.
Nothing has changed – even after 13 long years…except the amount of litter that has piled up in the neighborhood.
Joel Ohman, Domain Superstar, LLC:
Treat domain investing just like a regular “offline” business/job and avoid being both dumb and lazy. Many people are attracted to domain investing because they think for some reason that it is easy money that almost anyone can get a hold of – even dumb and lazy people.
The most important thing to remember is that making money online (whether it is domain investing, web development, blogging, etc.) is exactly the same as making money “offline” in that the exact same principles for success apply.
You have to be disciplined, motivated, smart, hard working, and more (or just very lucky in the case of some) to be successful as a domainer. There is no magic elixir that one find out about just by starting an “online” business that guarantees lots of money for lazy dumb people.
It is worth noting that you are usually allowed the luxury of being able to be either lazy or dumb and still be able to be at least marginally successful online because the growth and opportunities are still so great with the various online business models still in relative infancy – you just can’t be both dumb AND lazy and expect to be even remotely successful.
Treat domain investing just like you would treat any other business/job – work extremely hard, learn as much as you can, and if you find yourself just waiting around doing nothing then ask yourself if you are enough of a genius to be able to get away with being lazy while still thinking that you will make a lot of money. Chances are – you’re not .
Franky Tong, BowlingLanes.com:
I think the one advice I’d give a new comer would be: don’t fool yourslef into believing there’s easy money in domaining. It’s a lot of hard work, in researching, finding deals, experimenting etc. To a lot of people domainers may seem to have an easy life but it’s only because the hard work was already done years ago. If anyone wants to succeed in this at this stage of the game, be prepared to put in a lot of work and dedication.
Jessica Bookstaff, PigeonForge.com:
1. Focus – Have a plan and a clear goal and stick with it. It is very easy to get sidetracked.
2. Invest in the BEST dotCom you can afford and DEVELOP it with heart. If you can’t develop it with passion then you either need to sell it or start lying to yourself. 😉
3. Ask questions! We are a huge industry of successful entrepreneurs who for the most part are willing to provide information, support and guidance.
Jamie Zoch, Dot Weekly:
A domain name purchase should never be an impulse buy. Just because a domain name looks or sounds cool does not mean it holds value. Every domain purchase should be researched for term popularity, be free of trademarks or potential issues and easily display potential ways to profit from the domain before you even consider buying. Making a great investment often means purchasing something others would consider crazy, so taking some risks often pays off. Quality is much more important then Quantity with domain names!
Michael Castello, Castello Cities Internet Network:
Start your development on something you like and can get your arms around. Nothing to big. Spent one hour every day putting unique content into site and have patience.
George Kirikos, Leap of Faith Financial Services:
My only piece of advice to others would be to read classic literature. Everything one needs to learn about life, including business and investing, can be found by thinking deeply about ideas and words written hundreds or even thousands of years ago.
For example, Act 1, Scene 3 of Hamlet contains a famous speech by Polonius giving advice to his son which certainly is eternal wisdom: http://shakespeare.mit.edu/hamlet/hamlet.1.3.html
And these few precepts in thy memory
See thou character. Give thy thoughts no tongue,
Nor any unproportioned thought his act.
Be thou familiar, but by no means vulgar.
Those friends thou hast, and their adoption tried,
Grapple them to thy soul with hoops of steel;
But do not dull thy palm with entertainment
Of each new-hatch’d, unfledged comrade. Beware
Of entrance to a quarrel, but being in,
Bear’t that the opposed may beware of thee.
Give every man thy ear, but few thy voice;
Take each man’s censure, but reserve thy judgment.
Costly thy habit as thy purse can buy,
But not express’d in fancy; rich, not gaudy;
For the apparel oft proclaims the man,
And they in France of the best rank and station
Are of a most select and generous chief in that.
Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
This above all: to thine ownself be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.
Deconstructing and thinking deeply about that speech, one can learn about being careful with leverage, for example. Or that one should be a great listener. One should be true to oneself. And much, much more (one can write books about the meaning and implications of that single speech, not just for business but for one’s life). Great truths are contained throughout Hamlet, throughout Shakespeare’s other plays, and throughout the greatest works of literature.
I certainly cannot improve upon that guidance and the lessons one can discover through ongoing education.
Kevin Leto, Big Ticket Domains:
Kevin’s Words of Wisdom . . . .
1. The key to success on the Internet is innovation.
2. Never ever quit until you accomplish your goals and objectives. Persistence is the key. Every NO takes you one step closer to a YES.
3. Dream big and know anything your mind can conceive you can achieve.
4. Always share the capital risk in new business ventures. When you get into business markets you haven’t been in before, nor know anything about, be sure to have partners who do.
5. Networking is everything. Your most valuable asset is your rolodex.
6. Never stop learning. Knowledge is the ultimate Power! The more you know the more valuable you are.
7. Save, save, save for rainy days. No matter how successful, wealthy, or brilliant you think you are, shit happens and you can lose it all one day.
8. Take good care of your pennies and they’ll create dollars and take good care of you. Spend your profits prudently and remember the best investment you can make is what got you rich in the first place, YOU!
9. The wealthier you get and look the more people will try to overcharge you for things. Stay lowkey and you’ll save lots of money.
10. The most important skills to master in business are selling and closing.
11. Don’t bank on FOREVER! This is the biggest mistake entrepreneurs make. Nothing is forever! We live in a dynamic world where tomorrow a single new technology can destroy your business. Ask any tech CEO what their biggest fear is and they’ll all tell you the same thing, waking up and turning on the news and seeing a new innovative product or service just came out that revolutionizes the entire marketplace.
And realize, domains are not forever either. One day in the future the Internet will be totally changed from what it is and how it works today and domains will no longer be in the equation of things. We’re safe for now and in the near future, but not forever.
12. Never think the biggest players in domaining are any smarter than you. Most were just in the right place at the right time, saw the opportunities ahead and made the right acquisition decisions. Nothing more, nothing less.
13. Either go with the strategy of building lots of small sites or focus on a few big site projects. Either way can work, but do go beyond just buying and selling domains and get into building and creating. It’s way more challenging, with greater rewards, and much more exciting each day!
14. Always give back to your community some of your time and wealth and help others less fortunate than you to succeed and prosper too.
Tommy Butler, Glasgow.com:
Plan what you are aiming to do focus on that domain or domains that can make it for you.
Go with your guts and if you have the buzz with the name then you know its right. Look at the development potential of the name as thats where it is at the moment forget parking its dead.
Use Pool and Snapnames for those $ 60.00 drops you would be surprised what you can pick up and flip for 10 to 20 times the cost.
picked up many $60.00 drops then sold them for $12.000 to $18.000 one mans junk is another mans goldmine.
Donna Mahony, Domain Boardroom:
If I could only give one piece of advice, it would be to build relationships. Grow your own network.
Take the time to read the boards and blogs and see who is well respected and always helpful. Grab on to their coattails and follow their example.
Stay clear of the those who need to always be confrontational.
If somebody needs help, step up to the best of your ability and don’t be afraid to ask for help either. Most of those successful domainers remember when they needed a hand and are quick to extend theirs.
Your reputation will follow you forever in this digital world. Keep it clean!
One Piece of Advice (okay a few)
– Buy the best quality domain(s) that you can afford to. The starting point for me would be .com and then next, ccTLD’s that have fairly wide commercial usage in that country.
– It is not about quantity, but quality.
– Avoid wasting money on domains that are nothing more than lottery tickets and pipe dreams.
– Diversify your domain business. There is a whole world out there besides PPC, including affiliate programs, lead generation programs and small and larger scale development.
– Spend less time reading and talking about the domain business and more time actually moving your Internet business forward.
The most important advice I can give is;
– Don’t listen to stupid people.
– Get control of the cash register and get everyone else’s hand out of your wallet.
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