Hipster Should Buy Hipster.com
Neustar Domain Names

Hipster Gets $1M in Funding: Should They Buy Hipster.com?

10

UseHipster.com

I was reading Techcrunch last night, and I learned that the cool startup called Hipster received $1,000,000 in funding. There were several companies involved in this round of funding, including Google Ventures, Mitch Kapor, Dave McClure, Charles River Ventures, and others.

Since the company currently uses the domain name UseHipster.com but is known simply as Hipster, I think they should do what they can to buy Hipster.com, a domain name that seems under-utilized at the moment. One thing in Hipster’s favor is that the owner of Hipster.com also appears to own Hipster.net, so perhaps they’d be interested in a nice payday and could revert to Hipster.net.

As you can see from the Compete stats (posted below), it appears that a significant percentage of traffic that appears intended for Hipster ends up on Hipster.com in error. Of course, they aren’t likely to be confused, but why chance losing any traffic when they now have some funding to purchase the name.

January 2011: UseHipster.com – 43,097 Hipster.com – 9,643
February 2011: UseHipster.com – 12,193 Hipster.com – 4,481
March 2011: UseHipster.com – 12,595 Hipster.com – 5,378
April 2011: UseHipster.com – 1,375 Hipster.com – 2,559

My opinion is that Hipster should use some of its funding and purchase Hipster.com. What do you think?


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (10)

    M

    I agree, even aside from the extra traffic, “UseHipster.com” is awful for branding. They should be doing everything possible to secure “Hipster.com”, even if it costs them low XXX,XXX to mix XXX,XXX.

    May 17th, 2011 at 9:10 am

    LS Morgan

    I’m going to venture a guess- that acquiring Hipster.com is something they’ve already considered, likely tried, but encountered some price-fantasist who quoted them an amount that, if not higher than what they received in this funding round, would have been a huge percentage of it.

    So, you sit around the conference table and brainstorm the most efficient ways to use that money for purposes of expanding your reach. Spending a fuckton to “theoretically upgrade” your domain name is pretty low on the priority totem… but in Domainer logic, it’s usually the other way around. To them, everything begins and ends with the domain name.

    They’ve already received a million dollars in venture finding, using an $8 domain name. Seems like they’re doing something right.

    May 17th, 2011 at 9:17 am

    MT

    Strongly disagree here. “UseHipster.com” sounds ridiculous. Even apart from the extra traffic that Hipster.com is receiving, the name is a memorable gem. I think they would be stupid to pass on the Hipster.com name even if they have to shell out low XXX,XXX to mid XXX,XXX. “Use Hipster” sounds like an advertisement to literally “use” “hipster.com.” These guys have been all over the tech blogs and they clearly have financial backing- they would be idiots to actually keep their current domain name.

    Either get Hipster.com or change the damn name.

    May 17th, 2011 at 11:04 am

    Jeff Edelman

    Unless the sales price for the domain is insanely high, they most certainly should buy hipster.com. As one of the people mentioned above, even branding “UseHipster.com” makes it sound like you are pointing people to “use” Hipster.com. Not having the prime generic is already using up a lot of opportunity costs and as their business grows, their opportunity costs will grow further. They should buy it now.

    May 17th, 2011 at 11:23 am

    rj

    Domainers have to distinguish between 1) Businesses built around Keyword Search e.x. Insurance Quotes where an exact match domain is invaluable and 2) A business built around a branding / content play where a domain is fungible. UserHipster, Iamahipster, Hipster all will suffice.

    May 17th, 2011 at 11:45 am

    LS Morgan

    The initial project is appears to be a gigantic application beta. It seems they acid tested it by using it as an engine for SXSW questions, intending to expand its reach into local geo markets as a general Q&A app.

    I wonder if they don’t already own Hipster.com and are keeping the legacy development on page until full launch (to say it’s “thinly developed” is a massive understatement), or maybe they have the domain under some sort of option contract to buy in the event the beta goes well and they decide they want it.

    Or, maybe they just don’t care about the domain at all and are cool with UseHipster.com.

    Domainer logic is entirely different than marketer logic, which is much more nuanced and considers how and where an application will be pushed.

    The whole thing smells of a tricky app beta. Debut it for one purpose, wring out the bugs, get some feedback, then relaunch with your objective- which may not involve the same domain name.

    May 17th, 2011 at 2:18 pm

    Some Guy

    Sounds like Dropbox who’s domain was UseDropbox.com but was known as Dropbox, they eventually acquired the Dropbox.com domain. Also Facebook which started as TheFacebook.com.

    I have no idea what Hipster actually is… I’m inclined to agree with LS Morgan that they’ve undoubtably already approached the Hipster.com registrant and the price is simply too high *at this point in their financing*.

    I’m not saying insanely high or calling them “price-fanaticists” though. Hipster is common term, generic and very brandable. If anything this round of funding validates a high asking price for the domain, not undermine it. If it were my domain I would sit quietly for now and bide my time.

    If Hipster is a success, they will eventually pony up for the domain. If not or if it is indeed a trick beta, it does nothing to diminish the value of the domain which is, again, commonly used, generic, brandable and passes the radio, billboard and TV tests.

    Sit tight Hipster.com registrant. To sell a domain for $1M, you must first pass on $750k…

    May 17th, 2011 at 5:32 pm

    Mark Jeftovic

    The suggestion that they should acquire hipster.com even at the cost of low to mid xxx,xxx is (I’m sorry to say) idiotic. You want them to use half their funding round to buy the domain name?

    They could probably rebrand to a completely different name and brand with the corresponding .com for a tenth of that, and use the rest of the funding for what it’s intended to: developing the business.

    Capital allocation 101 guys: what gets you the biggest return on the outlay? It certainly isn’t buying the .com at some exorbitant price just because the name matches.

    Pick a new name, get the domain, move on and execute.

    May 18th, 2011 at 3:00 pm

    Jeff Edelman

    I completely disagree with Mark’s analysis on what he sees as a better capital allocation. You mention low to mid xxx,xxx. So let’s say that you are using $300,000 as your number. 1/10th of that is $30,000. Are you really suggesting that they can rebrand their company for $30,000 and get a lot of value on that? $30,000 for marketing and promotion and advertising would get them almost no benefit. It’s such a drop in the bucket that it would be barely noticed in the marketplace. Companies are clearly undervaluing the worth that they get in that having the domain, hipster.com, will bring them a steady stream of new customers daily. And it’s not a one-time $30,000 ad campaign that gives them a little blip in sales or awareness or traffic. The prime generic domain name gives them a steady stream of all that forever.

    May 18th, 2011 at 4:03 pm

    Mark Jeftovic

    Jeff, I’m suggesting that if they wanted to move off of “usehipster.com”, they could just pick some other name, rebrand onto it, and choose one where they can get the corresponding domain for a tenth of the cost (30K to 50K).

    These guys just took on 1M funding round, spending up to half that on acquiring “hipster.com” is insane. for starters, the name itself isn’t worth that. Second, they’d be blowing half their funding on it.

    There are better uses that the funding can and should be put toward (like building out their product – whatever that is, I can’t even really figure out what it is they do exactly)

    Which raises another point: hipster in itself isn’t exactly generic, it’s nebulous, it can have different meanings to different people, and the reasons why somebody would type “hipster” into a location bar could vary widely. It isn’t in the same category as “paydayloans.com”, “domains.com” or for that matter “student.com”, where the meaning behind the word is much less ambiguous.

    May 18th, 2011 at 8:08 pm

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