Why Domainers Don't Generally Partner Up | DomainInvesting.com

Why Domainers Don’t Generally Partner Up

21

I’ve received a few “partnership” offers, and I know that domain owners who have premium domain names receive development partnership requests often. I am sure Rick has received dozens of email requests from people who want to help him open a candy store on Candy.com. When it comes to partnership requests, it’s unlikely that the requester will be taken seriously.

It seems that most people want the domain owner to trust that they know what they are doing, and many times, they might, but they can’t prove it. Why would a domain owner be willing to risk his reputation (and domain name) on someone that randomly pops in with an idea? There are plenty of great ideas out there, but execution is what’s important. If you want to partner with me or another domainer, come to us with case studies of your successful businesses. Show us how much revenue you’ve generated by applying your idea elsewhere, and perhaps we can talk.

The problem is that most people have good ideas but no clue about the execution side of things. It’s very easy to tell someone else how they should run their business, but when it comes down to it, the execution is the most difficult part. Toys.com may look like a great $5,000,000 domain name, but a new company would probably have to spend double or triple that on the inventory, overhead, and fulfillment in order to set up a system that will drive a strong return on the investment.

If you do have the ability and a track record of successful web launches, you need to be willing to put in the time, effort, and finances with the hopes of sharing profits on a finished site. If you achieve agreed upon goals, you should get a percentage of the business, but not until that happens. If you are willing to do all of this, then perhaps we will entrust you with our premium domain names. If not, it’s probably best to find someone else for your experiment.

The other option is to do something on your own, start generating revenue, and then pitch the domain owner on integrating the successful business model with the industry defining domain name he owns. The key to all of this is that you must be able to build and manage a successful business, otherwise you will just waste your time and the domain owner’s time.


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.


Reach out to Elliot: Twitter | | Facebook | Email

Comments (21)

    RF

    I myself have spoken to few people in the past about domain partnerships and it is very difficult to put together.

    I have noticed that only people who are real friends and can trust each other tend do this like Cowboys.com is a great example – Rick, Eric, Sahar and Im not sure if there is anyone else on that deal but they are few and far between.

    I was looking for a partner for a while to develop an adult site but found no joy.

    So I have started to build out my own minisites and then I shall move onto full development.

    Trust is something you have earn – I would suggest anyone that is interested in putting a partnership together set out example of there previous work, include profit and projections dont just send an email saying – I want to build a Candy Store on candy.com – Have a business plan ready and that might get you some more respect and maybe even a reply.

    March 5th, 2009 at 12:44 pm

    Alexandar Tzanov

    Elliot, to my understanding your post is about a domain owner partnering in a business. I am involved in handful of websites and 3 different companies, and a day job. A domainner might find it overwhelming to make decisions in number of companies, unless his or her only contribution is the domain and they just benefit percentage of the business profits. But then wouldn’t it be in the business owner’s interest to simply lease the domain? This was the case with Vibrator.com.

    I would like to read your opinion on domainers leasing domains for development and the whoel idea of leasing domains.

    March 5th, 2009 at 12:45 pm

    Dan Sanchez

    This is exactly what I realized was happening when I approached some domainers with a partnership to develop some of their names. I agree with you completely Elliot, that is why the only thing I have been doing lately is working on my own projects and transform them into businesses.

    Having a premium domain in some industries can really mean an “unfair” competitive advantage. Especially when you deploy already proven techniques to reach more people, like SEO.

    Fantastic post, Elliot.

    March 5th, 2009 at 12:47 pm

    Alexandar Tzanov

    Elliot,

    Thanks. I missed your other post. But I’ve provided my response to it.

    March 5th, 2009 at 12:58 pm

    James

    What you outline above is not a good proposition for either party in a partnership if the domain involved is not of the highest quality. Best avoided.

    But good partnerships work best when great domains are at stake. Great domains are sometimes owned by clueless people but monetized by partners that are often the brains of the operation. A win win situation for both parties in that case. The strength of a partnership can be gauged by the quality of a domain and the opportunity that domain presents to produce wealth for the partners.

    March 5th, 2009 at 1:24 pm

    DnDot.com

    I think as you mentioned execution is probably one of the most important parts in business in general.

    People probably have 100s of great ideas but never get around to the execution part so nothing ever happens to them.

    March 5th, 2009 at 1:38 pm

    Gerry

    The best line of the thread is

    “…find someone else for your experiment.”

    The entire article is about experimentation with someone else’s product which, as you pointed out, is not likely to happen.

    A high profile domain and a high profile domainer will have a higher risk factor.

    Yes, bring something to the table rather than ideas and concepts.

    March 5th, 2009 at 2:16 pm

    Steve

    “good partnerships work best when great domains are at stake.”

    Yes James, the better the domain the more motivated both sides of the partnership will be. Domain owners that have good names need to partner with experienced developers that take commissions from sales and get a percentage of the domain ownership if certain revenue levels have been met. As Elliot had mentioned.
    Some of the best revenue’s I have generated are from a simple wordpress niche site working directly with the supplier. We get very good commissions on each sale. AffordableBuildings(.ca)

    Cheers, Thanks for the great site Elliot!
    Steve
    ps. I did just pick up AffordableBuildings(.com) for all the purist’s out there. :) waiting to set it up.

    March 5th, 2009 at 4:30 pm

    Domain Superstar

    Assuming you don’t want to enter a partnership, how do you develop your domains? Do you do everything yourself or do you outsource certain elements (development, graphic design, copy, etc)?

    John

    March 5th, 2009 at 10:21 pm

    The "G." Man

    Now this is an interesting subject matter for me personally, because I & my partners have always been on the flipside of this subject matter. We have been involved in the online world since the 80s, launched our first domain in 93, and have garnered worldwide media coverage and a cliental list of basically “Whos Who in America!”

    We’ve done very successful things, but always on shoestring budgets that make you wonder how big they could really be with the right backing. During the hey days of the Internet, before the bubble, we watched lesser concepts that hadn’t been proven, get funded and we watched as lame duck internet ideas formed on a napkin got funded. We tried the Angle Investors and did the VC run and finally at the beginning of the bubble did receive a little funding, so little I wouldn’t mentioned it to anyone.

    So here we are today, still operating some of the same ideas which are still profitable, but just need to be given the proper backing to go to the next level. If this comes across negative, I don’t mean it that way at all, but just that we seem to always be on the flipside of this subject matter. LOL! šŸ˜€

    Sincerely,
    The “G.” Man

    March 6th, 2009 at 10:55 am

    Ryan

    As a domain owner and a developer I have a problem with domain owners when it comes to a partnership. Its hard work and takes a lot of time, resources and money to develop a business whether you have a great domain or not. Most of these domain owners that own big time names like Toys.com, Candy.com etc… Think just because they have the best name for their category that you only deserve 10-20% of the deal. I think the domain owner should take a lesser stake if your going to partner with someone that has the goods. Finding the right team of developers, designers, marketers, etc… With a bankroll to fund the project why in the world would they want to parter with a domain owner for such a small share because they had a good domain? Domainers need to take their heads out of the clouds and if your lucky enough to be approached buy the right group give up a huge stake of the name. $5,000,000 name paid in full or a 20% of a potential billion dollar business? Get my drift?

    March 6th, 2009 at 11:41 am

      Elliot Silver

      @Ryan – most domain owners who have fantastic category names don’t need the money enough to sell themselves short. They are happy to wait until the right deal comes around.

      @Julia – I am a domainer but am learning about development (Burbank.com & Lowell.com). It doesn’t take a rocket scientist to figure it out. Also, I was mostly referring to ultra premium names – like Rick’s which was my example.

      There are a number of examples of successful partnerships though. If the domain owner trusts the developer and visa versa based on past accomplishments, a profitable venture can be formed. It’s just difficult to find that. A lot of “noob chancers” try to pass themselves off as good developers.

      March 6th, 2009 at 2:43 pm

    Julia

    Agree with the above ^

    Development partnerships dont work mainly because;

    a, domainers over value their stock
    b, domainers by their nature are lazy
    c, domainers know nothing about development
    d, Ive got a domain and you do all the work deals are crap for the developer unless its an ultra premium name
    e, good developers are clearly not interested in this crappy arrangement which just leaves just the n00bie chancers

    basically, its a marriage made in hell. If any domainer has a good domain AND an idea then i recommend putting their money where their mouths are and get on over to scriptlance or rentacoder and pay for the service.

    When I read these pseudo offers about the forums – “Ive got this fabulous [two word].mobi and im looking for a partnership deal” I get so cross, I almost go out and blog about it.

    Even the example given at the outset about candy.com – Rick knows its undeveloped value, what amount of development could warrant a “partnership”?

    March 6th, 2009 at 2:25 pm

    Julia

    Well, of course youre right. I think in 2009, most domainers “develop” or are looking to develop per se.

    Except what they produce is mostly “tosh”.

    Downloading a copy of wordpress, joomla, cafepress et al and adding some rushed content notwithstanding.

    I blogged about this a while back and I stand by my comment that Im yet to see something with the “wow factor” produced by a domainer. We seem to not be able to remove ourselves from the “must make revenue” from day 1 approach that ruins any good intentions of creating, as google say, something with unique and compelling content.

    The other big problem with domainers developing is that they want something that takes the “load and launch” approach. That being, domainers want to spend a bit of time making something, add some content and then walk away, expecting the site to grow and flourish on its own. No successful platform has this.

    Domainers developing is all the rage right now. My advice is, and has always been, choose 1 domain and spend a few hours a day nuturing it. I personally have 5 platforms right now that are my responsibility. Each gets my undevoted attention each and every day.. Im not saying they are successful (yet) but I have a plan, I have a target, I have benchmarks and I signed up knowing this will involve my effort.

    Going full circle and back to my original post, I still believe the mass development wont happen because domainers are inherently lazy.

    Im yet to be disproven..! And im a domainer.

    March 6th, 2009 at 3:50 pm

    Steve

    Julia,
    Thanks for the heads up on rentacoder and scriptlance. They look like great sites for those of us looking for professional assistance. I will definitely be checking out the services.

    Ryan,
    I always felt a 50/50 revenue split seems fair. As well if certain revenue targets are met an ownership position is not unreasonable. This would motivate everyone involved to produce better results. Everyone benefits. Holding a great name 100% and getting a pittance is not as good as having a great domain making huge revenues and owning even 20%. A small piece of a big pie is always better than a small pie. :)
    Best,
    Steve

    March 6th, 2009 at 4:31 pm

    Ryan

    @elliot:” most domain owners who have fantastic category names donā€™t need the money enough to sell themselves short. They are happy to wait until the right deal comes around.”

    Okay, I still have to disagree because if you take a name thats worth $100,000 if someone was to buy it outright but if partnered and built out with experts not newbies, experts! The name could be worth $10,000,000 and your splits 20% you now made $2,000,000 off that same name because you partnered with a company that knew what they are doing. So me im partnering.

    There are many ways that a deal can be set up. It all depends on the name and the people developing it. Top notch developers, SEO experts, marketing experts are expensive so a lot of times the person wanting to develop your name is bringing more money to the table than you are with a domain name. Doesn’t matter how great the name is if you plan on making it big you still have to run PPC campaigns, banner campaigns, affiliate programs etc. In addition to the natural traffic that the site gets. But, you must keep in mind the bigger time the name the more money its going to cost to take it to the top period! Nothings easy:)

    @STEVE- In some deals a 50/50 split is except able It all depends on the people, domain, and the overall game plan. Im just stating my POV based on some big time names that I have been approached by to develop in a partnership. Hmmm iPhones.com…

    Also, Elliot great blog im a big fan of the blog if you ever want to shoot the shit give me a call.

    March 6th, 2009 at 6:26 pm

      Elliot Silver

      @Ryan – with the right partners, yes I agree, but it would be very difficult to turn a $100k name into a $10,000,000 enterprise, and likely a lot of venture capital. Thanks for the blog compliment… I edited out your number to avoid bots taking it :)

      March 6th, 2009 at 6:30 pm

    wannadevelop.com

    Taking a domain that has hundreds or thousands of visitors per day and making it work is pretty easy.

    Taking a decent generic (commercial type) name that for example consists of two words which receives only a few visitors per day from type ins per day/per week and making it work long term involves thousands of dollars in investment upfront and it will be a long and grueling process.

    Development is done in stages and there are still no guarantees no matter what anybody tells you. Just hopes!

    If you team up with experts.. You can have a bit of peace of mind.

    That is why you pay a premium.

    If you team up with newbies and/or partnerships.. You are setting yourself up for failure from more than one angle.

    Nobody is going to approach you one day and tell you “hey i am going to do all the work and split it 50/50″ it just doesn’t work. Scratch that idea.

    All of the best SEO and developers are busy working on their own projects.

    If you have a domain name and you want to develop it, you need to shop around for partnerships and do your homework. Not the other way around.

    All the best,

    Mike

    March 6th, 2009 at 7:14 pm

    Jim Holleran

    Partners get in the way. I just outsource things. I done very well in domaining and I enjoy not having to partner with anybody. No employee’s, no partners, nobody to answer to,
    (don’t tell my wife that :)

    Thanks, Jim

    March 7th, 2009 at 10:32 am

Leave a Reply

Name *

Mail *

Website