Frager Factor

Sunday, May 06, 2012

Don't Go Broke Chasing Domain Dreams

Photo: Rick and Alina Rusu-Schwartz via Facebook

Rick's post about no one can make a decision got me dusting off this 2000 post to his board in response to a guy who keep asking me if I agreed that his pigeon shit domains were worth millions.  My response:

I see a lot of me in you.  I've spent 25 years naming products and services and believed the Internet and the scarcity of domains necessitated that the corporate naming process be done in reverse.  
Choose an available domain name then build the brand around it. So, in 199, I spent the two years of my life getting creative with word combinations and chasing domain dreams. I put my business and clients on hold to develop concepts around these domains, identify corporate prospects, write letters and make presentations. I even flew distances to meet people and engaged a lawyer for over $10,000.  
I got nowhere.  
The world at large simply wasn't interested in "creative" domains back then. 
At this point the corporate mentalities out there just miss the point and thus the opportunity.
Perhaps its because of the way corporations are structured that give no one person the authority to do anything and thereby discourage new ideas. They only know how to do things THEIR way ... which in terms of a name is to hire an expensive naming company and develop a name from scratch using the traditional methods. That's where the Verizon's and Cingulars are coming from. But if you look at the top 25 websites, they all fall into this "coined" name category. 
While I did sell a few domains in the $25,000 range, it was far less than I could have made if I hadn't lost focus on my business. I recently returned to my main business and am letting most of my domains drop. When I started registering domains in 1998 the country was caught up in Internet fever and I did all I could do to optimize that short window of opportunity. 
Now no one is going to give you the time of day. But I will keep the domains I have as a sideline, just in case. I believe, like your ideas, they are still viable ideas.

If your domains bring type-ins, it's another matter. But then only really profitable in adult. I have some such names and so far they've produced minimal income. Most people on the board are accumulating domains that get 10 or more type-ins and point them to one search engine page. To me, that defeats the whole point of a type-in which is targeted lead. Of course any domain can be developed and that costs money. 
And if you are holding a three letter domain that matches the initials of a firm, that's a whole different ballgame, one in which you can still get rich with domains.
Jeff, I love your enthusiasm, but be careful with your spending. If you're self-funding your efforts by selling domains than buying more with the proceeds, fine. But if you are dipping into credit cards at your age, you are putting yourself in a dangerous spot. If you go bankrupt, your whole life will be marked. Any job application today includes a credit check. What's more, if you've invested so much in college, and are staying up all night waiting for dropped domains rather than studying, you may be robbing "Peter to pay Paul." Ultimately you'll loose more than you can ever make from domains.
Perhaps I'm off-base but I've seen too many young people from our discussion group go down this road before and if I can help focus someone in the right direction I believe I should.
In terms of branding, experts will tell you that a name is irrelevant because if you have enough money any name can be branded. If you think about Coca-Cola. Crest or Kodak, you can look at their logos in any country in any language and still recognize what they stand for. I'm not sure how "Tooth Juice" translates in Arabic. But that necessary analysis is part of what they get from a naming company that they won't get by just randomly choosing a name from you or me. 
Good luck.

12 years later the tides have turned somewhat, the y advice was right on the money. But  most guys who chased domains against this advice did go broke trying. Thousands of them swallowed by high surfs they rode into like pros when they hadn't even had a basic training lesson.

Today,  What a great feeling it is to see all these domain names finally find great uses. 

As Seth Godin puts it, "Industries are being remade and there's more leverage for the insurgent outsider than ever before in history.

The status quo is taking a beating, there's no question about it. That's what makes it a revolution.
People have started social movements, built billion dollar companies, toppled dictators, found new jobs, learned new skills and generally made a ruckus.

I will profit from the hundred or so domains I winnowed my portfolio down to and also profit from the thousands i allowed myself to drop.

About The Author: Owen Frager is an Internet marketing expert ready to help take your company to the next level.

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