A couple of guys I’d like to hang out with: Braden Pollock and Nat Cohen

Seriously, how cool would it be to sit down with these two guys and have a beer or dinner and talk about domain names, entrepreneurship, and their experiences. Just an hour with these two guys would be like a full advanced college course in domaining.  I would honestly be taking notes while beer dripped across the pages because, yes, I’m that guy taking notes at a bar on paper – not even on an iPad.

Well, guess what?  We don’t get an hour. You can still have a beer if you want, that’s your call.  But get the most out of the next 15 minutes of your life by watching these two hit on topics such as UDRPs, ICANN and ICA.  Thanks to NamePros for antoher great video.

[scroll-box]Braden: Nat Cohen, welcome to NamesCon.

Nat: Good to be here.

Braden: Happy to have you. You’ve come to all of them, right?

Nat: I missed the first one.

Braden: You missed the first one?

Nat: Yeah.

Braden: I don’t know if we should even do this interview now.

Nat: I’ve just been doing holiday travel and I was like, “Richard, this is a great conference idea but I’m just not coming out.

Braden: You gotta squeeze it in.

Nat: Yep.

Braden: You’ve been coming to domain conferences forever because you’ve been…

Nat: I went to the first T.R.A.F.F.I.C one 2004.

Braden: Tell us about what you do. You have a massive portfolio. You’ve been doing it a long time. Tell us about how you got started and why you got started, your experience in the domain industry, and who the heck you are.

Nat: Okay. Well, I am… Yeah. I’m from DC, grew up in the area, and I got into domains by accident when I was just trying to publish a website and learn about how to register a domain to do it. And then learned about people investing in domains and got curious and looked into what was available, and that’s what I got started on. And I have a… Yeah, have a sort of a generic portfolio since 1997.

Braden: Wow.

Nat: And…

Braden: And that’s really…that was early on, right?

Nat: It was early on but people liked Digimedia and other ones who were there, even earlier, had taken all the good stuff.

Braden: But only by a few years.

Nat: Doesn’t matter if it’s by…you know if it is one second. You miss it by one second, it’s too late.

Braden: Granted. But it’s still early on because only it was, what, mid ’94, ’95? When did it go public?

Nat: That’s when people… That’s when it… Yeah. ’95, ’94, ’95, was like Rick Schwartz and those kind of guys started saying, “This is what we’re gonna do.”

Braden: Because prior to that, you had to be on the inside to get a name.

Nat: I think, yeah. I don’t know much about it, but yeah.

Braden: So, you’re old school.

Nat: Relatively early. And yeah. So, got names through registrations, some drop catching, a lot of purchases along the way, and try to just keep increasing the value of the portfolio and hope, yeah. Hopefully, I’ve done that.

Braden: Did you do much in the Dot-bomb at about 2000, 2001 when a lot of these names were expiring that used to be companies?

Nat: I actually got distracted in trying to do development and that took my focus out for a couple of years, probably right when like Frank and those guys were catching all the good stuff that was dropping.

Braden: Yeah. Frank Schilling really did well that period.

Nat: Then, I’m also involved with the ICA on the board level and have that’s been kind of like the main area of focus for me for a lot of years.

Braden: Yeah. You spend a lot of time.

Nat: Yep.

Braden: The Internet Commerce Association.

Nat: So, I care about the policy side of things because I realized that these domains that I was investing in and buying in, that I thought I owned, my ownership in them wasn’t as secure as I thought they were because people…there was a way that you can come and take away domains from a domain owner. And I lost crew.com in a decision that, you know, I thought…

Braden: I was gonna ask if you had some bad decisions.

Nat: Yes. When I was… I had one of the very first UDRPs, I think, on like a dictionary word domain.

Braden: Uniform Dispute Resolution Protocol.

Nat: Dispute Resolution Procedure/Policy. Policy I think.

Braden: Procedure? Policy?

Nat: Yep

Braden: Something P.

Nat: Something with a P in it. Yeah. So, that was something they introduced.

Braden: And that’s how a company claiming trademark rights goes through ICANN to take a name from the registrant.

Nat: Yes. So, if they think that someone is registering a domain to target their trademark, and a lot of people have done that, and that’s a policy that they can use to get the domain transferred to them. And that policy was built for cybersquatting but it’s been expanded and expanded to a lot of investment domains, dictionary word domains. As domain investors, we’re in this tricky situation where we wanna buy domains that companies like, but the issue is that some companies have already liked that name and trademarked it. So, the question is to what extent when you buy this domain are you targeting that trademark that’s there, or are you buying it because it’s got inherent value? And that’s always been the key issue that’s come down. And a lot of the people who are deciding these things are trademark attorneys and they tend to look at it more from the perspective, if the company has a trademark and you don’t, then why are you buying this if you don’t have a trademark? The only possible reason you’d be buying it is to try and target my client who’s got the trademark.

Braden: Which is certainly not the case if it’s a generic word.

Nat: I mean, some people could buy a generic word to target an existing trademark but, you know, domain investors are buying them because the word has inherent value and it could be of interest to anybody in any company.

Braden: Right. Any kind of brand.

Nat: Yeah. So, it’s the… This new policy was written in a broad enough way that a lot of investment domains got caught in that net. And it’s implemented in a way that’s kind of trademark…from a trademark focus. And so you get the wrong guy on the panel and he’ll take a look at it and he’ll just won’t…he won’t give too much credence to the view that this domain has inherent value. He’ll think it’s only because of the trademark value.

Braden: The panelists are the decision makers through the UDRP process.

Nat: Right. They are… They get…

Braden: So, they represent ICANN and get to make the decision, yeah?

Nat: Well, they don’t represent ICANN.

Braden: Signed by ICANN? How would you…?

Nat: It’s a multi-step process and each step there’s less and less accountability. So, ICANN credits these providers of UDRP who get to administrator the UDRP under no contract at all, and then the UDRP providers get to pick who, pretty much under whatever standards they want, to be UDRP panelists. Some of them have no IP background, apparently. And then they’re set up.

Braden: How’s that possible?

Nat: Because their attorneys or lawyers… We don’t know what their criteria are. That’s one of the things. It’s a black box as to how they pick who they’re gonna use as a panelist and they may just not have… Some of their decisions make it pretty clear they don’t have a good understanding of trademark law. So, these are people who are then deciding whether or not you as a domain owner gets to keep your domain name.

Braden: And typically, who are these people? So these panelists, you say, a lot of times are lawyers or IP lawyers?

Nat: Yeah. I hope almost always they have a legal background. Some of them are retired. Some of them are academics. Actually, maybe not all of them are lawyers but a good chunk of them are active trademark attorneys who represent brand owners as clients in their day job and that’s their perspective.

Braden: So the decision makers are on the trademark side of the world.

Nat: Many of them are.

Braden: So, who’s representing the domain investors? So, who’s understanding that perspective? Is there anybody in the mix?

Nat: At the panelist level, very few, I think, have a particular understanding of the domain investment industry. And so, yeah, your… If you just had to do a random draw, the odds are you won’t get somebody. And that’s why most, you know, most people recommend…there’s an option of a three-member panel or a one-member panel. And even though a three-member panel is significantly more expensive, they recommend trying to get three…that it’s better to get three panelists because you gonna have that diversity of perspective and you may just, from the random draw, you may get someone who doesn’t, frankly, doesn’t really have much of a clue or just has a very you know, minority perspective on what’s okay and what’s not okay.

Braden: As a domain investor, my name ends up on one of these panels because a trademark owner is trying to take it from me, even though I just have a generic word and they think they have…I’m infringing on their mark, which I’m not, and then the decision makers are trademark lawyers so I’m not gonna be represented. So, how do we fix that problem?

Nat: That’s a very good question and we don’t have an answer to that. There is a…

Braden: Nat, I come to you for answers.

Nat: Well, I can recommend a good restaurant.

Braden: Okay.

Nat: So, there’s an ICANN process. ICANN is the overall group charged with implementing this whole domain name system. And so they’re the ones who…through which this UDRP, the domain transfer policy was, you know, released or they’re the ones who created it through their process. And so they’re reviewing it for the very first time. And the ICA, of which we’re both members, is actively involved in that process. We haven’t gotten to the UDRP portion of it yet, and we’re hoping that that process will result in a more balanced…there’s trademark interest and trademark owners have rights but domain owners have rights too, and we’d like to see a little better balance there, a little better protections for trademark owners who aren’t infringing. There’s too much at risk now.

Braden: I appreciate the in-depth perspective. I’m gonna give you an opportunity to plug ICA, and then we’re gonna talk about NamesCon.

Nat: Okay.

Braden: So, how does someone support ICA?

Nat: They support by joining. That’s the usual way. They go to ICA.domains, which is our website, and they can learn a lot about it and there’s a chance to join. And they can read various testimonials as to why they should join there. And I can give a whole pitch about why people should join but I’ll leave that to you.

Braden: Well, we’re gonna move on to NamesCon. So, you’ve been in the space a long, long time, 20 plus years?

Nat: My 20th year.

Braden: Wow. Happy anniversary.

Nat: Thank you.

Braden: When somebody says, “What do you do?” What do you say? How do you explain when you say, “I’m a domain investor,” and they say, “What?”

Nat: I’ve tried many different variations and I haven’t settled on anything good yet, but I try and explain, you know, what it means to invest in a domain name. I think the approach I’m taking now is to say that every company that’s on the internet needs a name and there’s a limited pool of good quality names out there and that limited pool is what we call investment quality domains. And that the key thing when somebody has a name is that it can be memorable and you can remember what that name is. And the great thing about existing words is that some people are already familiar with them.

If you have some random combination of letters or some made-up word, no one’s ever heard of that, it’s hard for them to remember it. So there’s a lot of value to a company that that when you say their name, people are gonna remember it. That that name has some kind of meaning, then they get the benefit of that meaning being associated with their brand. So, if you have a nice memorable word that has some positive connotation, that’s a beautiful brand and companies who have big visions for their brand and wanna promote it and advertise it and spend a lot of money getting people to remember it, it’s worth a lot of money over their lifetime to get a brand that has those qualities to it.

Braden: And hopefully, those big companies come to me.

Nat: Me.

Braden: Oh.

Nat: Sorry.

Braden: Us.

Nat: Us. Yes

Braden: So, let’s say somebody wants… Somebody says, “That’s interesting. I wanna do that too.” What do they do? Where do they go? How do they get started?

Nat: Well, they’re lucky because there’s a tremendous amount of…tremendous number of people in the domain industry who are providing a tremendous amount of useful information for free and are just being very generous with their knowledge. So, there’s sites like domainsherpa.com, blogs like domaininvesting.com, domainnamewire.com, dnjournal.com. I’m leaving out the domainshane.com.

Braden: Or they can go to domaining.com which is an aggregator of all the…

Nat: Right. That’s a good…domaining.com. Yeah. You can find all sorts of…many, many of the blogs there. And once you dive in, there’s no end of excellent content and advice that you’ll get. So, I think, once you get started, you’ll get plenty of information there. And of course, come to NamesCon. I’ve said the right thing.

Braden: Yeah. That’s where we’re gonna go.

Nat: All right. Because this is where everybody is and the people are very generous with their information and there’s tons of sessions, especially geared towards newcomers to the industry that can get them, get you guys up and running and going after the better quality names, steering clear of bad investments.

Braden: So NamesCon, we’ve got about 1,300 attendees. It’s pretty good. It’s the most we’ve ever had in any domain conference ever.

Nat: Yeah.

Braden: Right? Including internationally. I don’t think there’s ever been a bigger name…

Nat: I believe you.

Braden: Yeah. Because I go to those.

Nat: Yes.

Nat: You’re out there.

Braden: 400 people maybe was the biggest one in Hong Kong. But this is huge. Everyone comes to this conference. It’s a great place to come meet people, network, and all the old school guys like you are here and then people can grab us and talk to us and ask questions. And we’re up on stage and we’re doing panels and there’s a lot of information to be learned here.

Nat: Yeah. There’s a lot of valuable information and there’s a number of, you know, there’s some people I’ve talked to over the year and they’re interested in domains. And I say…and a couple of them have come to NamesCon just because it’s like, “This is where I need to be,” and they’re not really domain investors but they have a good quality domain or they wanna learn more and this is the place to come.

Braden: Yeah. And they can also… We mentioned blogs. We mentioned NamesCon, and there’s also forums like NamePros.

Nat: What’s NamePros?

Braden: You haven’t heard it?

Nat: No.

Braden: Maybe…

Nat: Oh, NamePros. Yes, NamePros. That’s a great, great place to go. No, NamePros has done a wonderful job of creating a ton of excellent content, video interviews.

Braden: Right.

Nat: Yes. And my hats are off.

Braden: And you can ask questions to people in the forum and get answers and…

Nat: Yeah. My hats are off to the NamePros for stepping up and really creating a ton of valuable information for us.

Braden: Great content. Yeah. Okay. Nat, thank you for joining us. I appreciate your time. It’s great information. Thank you.[/scroll-box]

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Video Interview: Kevin Fink with Todd Han of Dynadot

This next NamePros video features Todd Han of Dynadot talking about the GTLDS and his first experience at NamesCon.  This video is from a couple years back.  Let’s see how the discussion played out.  Please note that the transcript is available below.  Please note the full transcript is availbale below the video.

[scroll-box]Kevin: We’re here at NamesCon 2016. I’m joined by Todd Han of Dynadot. Todd, it’s great to meet you.

Todd: Nice to meet you as well, Kevin.

Kevin: This is your first NamesCon. Tell me about the experience so far and how you’ve enjoyed it.

Todd: Well, actually I love it. I like how the conference center is set up. There’s a lot of traffic to our booth, seeing a lot of new faces. So actually, I think it’s a great event, yeah.

Kevin: So you founded Dynadot 2002?

Todd: Right.

Kevin: That’s pushing its 15th year now. Tell us about the C change of the domain industry and what’s happened over even just the last few years and where you guys are at now.

Todd: Well, when we started the company 2002, we had three TLDs: .COM, .NET, .ORG. Over the next five years, we added maybe five more: .BIZ, .INFO, .MOBI, .ASIA, .TEL. And then in 2014, we added 300 more. It was a C change, yeah.

Kevin: And how has the influx of Chinese investors in the last year or so changed Dynadot in terms of not only how you’ve had to adjust to interact with customers, but just also on a business level?

Todd: That’s a great point. We actually have been in China for the last three years. We have an office there. We have a Dev team, and we have customer service there. And that wasn’t because we knew this was gonna happen, we just knew that China was a big market, you know. But, like you said, this year, China just blew up. I ran the numbers just last week and our revenue in RMB in 2015 was 20x what it was in 2014. So that’s a 2,000% increase.

Kevin: Incredible, man. Congratulations.

Todd: They’re just buying everything.

Kevin: Yeah. That’s an incredible growth for you guys. So what are some… I don’t know if you can speak of maybe some…maybe not top-secret things but some changes on your end or some product enhancements or innovations that you hope to enact on the registrar level or…I know you guys have other things like drop catching and… What are some things that we can look forward to as customers?

Todd: Well, probably the biggest thing is just the selection of TLDs we have now. That was a ton of work for us to add, you know, 300 TLDs into our system. So, we sell pretty much everything. Our prices are good and, you know, they all come with our control panel, which is, you know, people say it’s one of the best in the industry. You can also you know, taste the new GTLDs if you want, it works with our Grace Deletion System. We have expired auctions on them.

So, you know, it’s been a year now, so some of them are starting to drop. So you can check out new GTLDs at our auctions. Other stuff, we also do a lot of business on the retail side. We’re trying to sell domains to end users as well, that’s actually half our business. The other half is selling to domain investors. And so on that side , we have a site builder where you can, you know, you just drag and drop, putting images onto the website, write text, and it’s online, just like that.

You don’t need to know any HTML. So we have that product. Actually, domainers use that as well, just to throw up something, you know, to do testing or just to throw up like a for sale page or whatever. And that product is actually free for the first five pages. So that took us a couple years to build out. And as far as anything beyond that, it’s probably just incremental improvement for this year. We’re gonna add more GTLDs. We’re gonna move back to starting to add CCTLDs back in our system.

Kevin: Speaking of the new extensions, the two-part question, I’m curious the top-performing newer extensions on Dynadot. I’m also curious if you have any favorites of your own?

Todd: You know, you can look at it in two ways in terms of volume, registrations or in terms of revenue. In terms of volume, I think we sell the most .CLUB and .XYZ. In terms of revenue, you know, .XYZs, you know, pretty much have been discounted the whole time. So, you know, even though we sell a lot of it, we don’t make as much. In terms of revenue, we had surprising results from some of the smaller ones like .ONE, and that kind of ties in with your previous question like this Chinese domainer has kind of jumped all over that one for some reason.

Kevin: I’ve noticed it.

Todd: Yeah. Right.

Kevin: It’s really interesting. Yeah.

Todd: Yeah. So I think we’re one of the top…I think we’re number two registrar in the world for .ONE due to our Chinese customer base. My personal favorite, I really like .NINJA. It’s just fun, quirky. You know, I think a lot of domains are very serious like .COM, .NET, .ORG, you know, but .NINJAS is like… Well, you can just do whatever with it, you know. It’s more fun, you know. I think our industry is very serious but it’s good to have some fun once in a while.

Kevin: It’s getting maybe a little a bit of a sense of humor of .LOL and other things.

Todd: Exactly. Or .WTO [SP]. Yeah.

Kevin: What are some words of advice that you might give a new domain, someone new to the space?

Todd: Talk to the old domainers, they have seen everything already. There is a lot of skepticism by the old-timers. And so if I were a domainer, I would talk to them. I mean, they’ve seen everything. They’ve seen the tasting come in and leave. They’ve seen Google clamp down on PPC. They’ve seen multiple TLDs launch and fail. So, all the knowledge is already there, you just have to ask the right people, yeah.

Kevin: This is the closing day of the conference. Is there any highlights that you’ve experienced so far, whether the keynotes talks, just meeting people in general, and walking around?

Todd: So for me, my favorite part is just seeing the friends I’ve made over the years and also meeting new people. So that’s my personal highlight. In terms of the business, I think no question, the biggest talking point was the Chinese economy. What I heard was, you know, up till 2010 or 2012, everyone was putting their money into real estate in China.

And then, you know, around 2012, the government was kind of trying to suppress the price. They raised interest rates. They limited how many properties you could buy. So, people started investing in the stock market. And the market in China, I think it tripled in the last three years or something ridiculous like that, until this summer. And then it had a mini-crash.

And then last week it crashed again. So people can’t invest in real estate, they can’t invest in stocks. So where’s that money gonna go? It turns out a lot of it went into domain names. And I think that’s what we’re seeing and other asset classes. I’ve heard fine art. I’ve heard wine. I’ve heard precious metals. So that was a real highlight just talking to CNNIC, talking to Chinese domainers, just seeing what they had to say about that.

Kevin: That’s interesting. Yeah. We’ve spoken to a few people who’ve heard various insights as to whether this either current or hopefully not future turbulence in the markets is going to affect domains, whether more people are gonna buy into it or people are gonna kind of withdraw from it from the market.

Todd: Yeah. What I heard was as long as the Chinese economy is not doing well, domains will do well. Once the Chinese economy picks up again, they’re gonna start investing in real estate and stocks again.

Kevin: Okay. That’s interesting. We’ll see what happens. [crosstalk 00:07:54]

Todd: That’s what I heard about it but I’m not an economist.

Kevin: Neither am I. Neither am I. So I know that Dynadot has a presence on NamePros. We’re here with NamePros in partnership with them.

Todd: We have CSRs on NamePros for sure. You know, a lot of people are actually more comfortable asking questions amongst their friends on the forums than asking us directly, and we’re actually fine with that. You know, we have nothing to hide. If you have a problem and it’s our fault, you know, we’ll fix it.

We’re not gonna try to cover it up or something. So we’re perfectly happy with people discussing things on NamePros. NamePros has been partners of ours for a long time now. I think even when we just started like, you know, people were talking about us on the forums on NamePros. And you know, from a business perspective, I mean, we work with NamePros. We do ads on NamePros, occasionally when we have specials of promos. So we’re really happy with our relationship with NamePros. And I think, you know, they’re part of the ecosystem, they’re a valuable part of the ecosystem. And so we’re just… We’re very grateful that people like us on NamePros. Yeah.

Kevin: Well, it was good to meet you. It was good speaking with you. And I look forward to seeing you next year.

Todd: Thank you so much, Kevin. I really appreciate your time. [/scroll-box]

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Morgan Linton of Bold Metrics

As promised, here is one of the videos from the NamePros library featuring Kevin Fink interviewing Morgan Linton.  Morgan was probably the second blogger I began to follow when I started dabbling in domain investing.  I really used to love the live video segment he did back in the day.  He would casually drink a glass of wine and tell people his advice on their domain names.  I missed an opportunity to join him once when he invited me to connect on the show but I had a broken mic.  Timing sucked.

In this video, you’ll hear Morgan talk about his background and his passions.  Being a domainer doesn’t mean you only focus on domains as you’ll learn in this one.  Watch the video and/or read the transcript.  Post your thoughts in the comments once you’re done.  Enjoy!

[scroll-box]Kevin: Morgan Linton joins me at NamesCon. It’s so great to see you again, Morgan. Thanks for being here with us.

Morgan: Thanks, a lot. Yeah, Kevin. Thanks for having me.

Kevin: Yeah. How is this year compared to all the other years and what’s excited you the most so far?

Morgan: Yeah, well, it’s good to see it grow. I’ve been here since it first started and definitely more people, more energy and, of course, the new GTLDs are shaking things up and becoming a bigger and bigger part of the conversation.

Kevin: So you know I have a bit of a history.

Morgan: Yeah, family history.

Kevin: That’s right. We do, we do, yeah. But we met quite a number of years ago, and you were at SONOS.

Morgan: Yes.

Kevin: And your evolution in this industry and beyond is really fascinating. I wanted to kind of briefly touch upon that. Let me know if I leave anything out.

Morgan: Sure.

Kevin: But you were at SONOS, and you started domaining, and you started a blog. And you started building up a portfolio and a supplemental income from there. And then you left SONOS, you started domaining full-time.

Morgan: Nope. I never started domaining full time. No, I’ve never aspired to be at full-time domaining. So I left SONOS and went right into starting fashion.

Kevin: That’s right, okay. So in between there though, your income started to, you know, your income in domaining started to increase exponentially.

Morgan: My internet domaining got much bigger than I had expected. So, yeah, I was making significantly more buying and selling domain names and monetizing than I was at my day job, so to speak.

Kevin: And you were a liaison to the startup community at one point as well. You’ve been in Los Angeles, and you started meeting startups, and you were helping them acquire domains.

Morgan: Yeah.

Kevin: And I want to get into that a little bit later, but then you started Fashion Metric, now Bold Metrics.

Morgan: Yeah.

Kevin: And I want to hear about this evolution into how you basically went from someone who was helping startups acquire domains to founding and running a startup.

Morgan: Yeah, yeah. Well, I mean, I think the inspiration really started when I was at SONOS. Because when I started at SONOS, there were maybe 40 people, somewhere in the 35 to 40 range and it was still like, you know, some people think like when you’re at that point, well, you must have figured stuff out. But no still a startup, still in search of product market fit, we didn’t have the product in the market. And I got to see that go from, you know, less than 50 people to over a 1,000 people during my time there and going from about 10 million funding to I think 360 million in funding.

And so seeing that growth and watching a startup scale, that for me was an incredible experience to see. But I realized I was only seeing a sliver of it because I was working and running sales organizations in Asia, Australia, Latin America, Canada. So I knew there’s like one niche of the business, but I realized like, “Wow, it’s so neat for the founders because they’re able to watch this grow and they’re able to see the entire business and how everything interacts together.” And that’s really where I got the inspiration.

I realized like, “Well I don’t know if I really want to work in a specific role in the company.” I alluded to like start a company and see what it’s like to build that team. And that was like kind of what first inspired me to do that. And then yeah, you know, being in LA at a time when the startup scene was starting to really grow and seeing a lot of that happen. And then being involved with domain names, I got to help some pretty well-known startups with the [00:03:14] names, Jay.

Kevin: That’s right. And then you and your wife, Dana, hello to her, by the way, started Fashion Metric.

Morgan: Yes.

Kevin: Can you describe sort of evolution into how that came to be and how that sort of sprouted?

Morgan: Yeah. So Dana was doing a Ph.D. at UCLA at the time. I was still at SONOS, but my SONOS stock had done pretty well, and there was a point where I could probably go on to do do something else. And kind of as we were talking about earlier, domains had also done kind of better than I expected. It kind of started as this kind of like thing on the side that I would see what happen and then it ended up making far more than I was making there, so I knew it was time to make a move.

But I had never, and this is a kind of something I always like to point out because I think there’s some people that like love domain investing and they’re like, “I’d love to do this day and night.” I’ve never really had that passion. I don’t think I have very much fun domaining day and night. I’ve never really wanted to be a full-time domainer. And so, for, me, it was like, “Well, I’d love to run a startup now.” And Dana was at a point where she was, you know, in her Ph.D. doing really interesting stuff but knew that she also wanted to do something more entrepreneurial.

And so, we actually just started going to like startup competitions. And so, I went to Lean Startup Machine which is you don’t actually build in there, you essentially like validate business models, and that’s essentially where the idea behind Fashion Metric came up. Dana had this idea for an app where if you were searching in a store for clothes and you were on your own, maybe you could take a picture of yourself and then get feedback from like a stylist that would say, “Hey, actually try this short or these pants.”

And the way that the Lean Startup methodology works is, you know, before you go out and build something, you validate like, “Would people actually use this.” And so, we went to all these clothing stores, talked to solo shoppers, people shopping on their own and said, “Hey, we’re building this app, here’s what it does, would you use it?” 90% of them said, “No, I wouldn’t use that. I don’t have an interest in taking pictures of myself and sending to a stylist.”

Kevin: So that was like fashion advice. That was that first thing, okay.

Morgan: Yeah. And so what you’re supposed to do then is, you know, understand okay, well, maybe you heap it on the problem. So we didn’t want to pivot on the use, the user is still someone shopping for clothes but we then asked them, “Okay, well, what’s the biggest problem that you have when you’re shopping for clothes?” And literally, 90% of the answers were, “It’s really hard to find stuff that fits. And boy, I wish I could shop online but everything fits differently.” And all these problems came out all around fit. And we realized well, there’s a big juicy problem that’s not really being solved in a great way online. And so went to some other startup competitions and ended up getting discovered by Mark Cuban, who pushed money into the company.

Kevin: That’s awesome.

Morgan: And, yeah, that was kind of all how it all started.

Kevin: Congratulations there.

Morgan: I didn’t quite know it was going to go all that way, but it’s…

Kevin: Backing up just a little bit before Fashion Metric, I remember throughout the years. I know that you’ve started merging into more of the startup world, you met quite a number of people, again, in Los Angeles and through some of the meetups and the community events and whatnot, startup events. Can you describe your experience as a liaison, I know at times you’ve been a broker, you’ve helped someone or startups acquire. Can you talk about the experience of working with these startups? Some of the pain points they’ve had. I know some of them have no budgets. What are some of the things, the roadblocks that you had to overcome as someone helping them acquire?

Morgan: Yeah, yeah. Well, I think there’s, you know, first off, most startup founders don’t know anything about domain names. And I think that the same is true most domain investors don’t know anything about startups and both kind of think they know something about each other. And the startups thinks that the domain investors are cyber squatters and domain investors think all the startup founders or low ballers and there’s actually a happy medium probably.

But, you know, I think for startup founders, the confusion is around, “What happens when the domain name that I want to buy is taken?” And so there’s this huge disconnect where a founder will come up with an idea for a name and then go, “I want to call my company this,” and they’ll go out and they’ll see this .com maybe it’s already taken by another company. Maybe it’s a parked page, you know, all this idea in their head of like, “Well, I should be able to get that because I came up with it and I’m going to use it.”

And they don’t know actually how to go through the process of like asking somebody via email, “Hey, what are you using this name for? Could I acquire it?” And that process is very mercurial and the domain investor community, there’s some folks that are great at responding working with startups and others that aren’t and are a little bit more abrasive.

Kevin: Right. It’s very delicate.

Morgan: And so, it’s very delicate.

Kevin: More so, almost on, well, especially the investor community. But I feel like those of you mentioned it already is a good point, just those two sides are kind of disparate ends of the spectrum.

Morgan: Yeah. You’re dealing with, you know, emotions on both sides. You have founders that are really passionate about the companies they’re building, and they’ve put a lot into coming up with this name that they feel really speaks to their company. And you have a domain owner or a domain investor that has done the same but in a different way where they have a portfolio of names and they’ve worked really hard and done the legwork and actually researching and finding the names and bidding on them and trying to get a good price.

And so, you know, it really takes both sides understanding. So I initially was working with smaller startups and names that were say under like $25,000. And for me, really what I found and the deals that I enjoyed the most were really when it was founders that were a little bit more funded and a little better understanding of like what domain names are ell for. A lot of what I did was like education about the market because most people don’t know what domain sell for. Like they don’t know that domains don’t just sell for a registration price.

They don’t know that like last week, a particular name sold for a $1 million and another name sold for [inaudible 00:08:46]. It’s like to them, that probably never happens. And so, I really focus on founders that had budgets in the six or seven figure range that really kind of had a little bit more of an understanding of, hey, and usually the conversation started, “Hey, I really want to get this name, I know it’s not going to be cheap but I’ve got a budget of, you know, $350,000 should we be able to make it work.” And that’s where you kind of have a meeting the middle for really good names.

Kevin: Sure.

Morgan: Not to say that startups obviously don’t need to buy. Bold Metrics, we bought for $3,500. We don’t have a huge budget for a name sure. And so, there’s a lot of names that are available, but I don’t think startups necessarily need brokers to help them with names in that size category because a lot they can do themselves. But it takes some education to understand how they actually do that.

Kevin: I was just going to say that. That component is sort of the missing link. I feel like, as you were talking, I’m thinking like, “There’s not really anybody out there bridging that gap.” But you certainly did and had some successes. How did you work with someone who, for instance, had a $3,500 budget but the seller or the owner was 135,000. How were able to sort of bridge that gap? Were you ever able to successfully get a startup to either take out a loan or get some more funding or capital backed, you know, for that? Or, I know sometimes there’s rev share probably share of equity.

Morgan: The Rev share profits share stuff is tough that people don’t really want to do it.

Kevin: It is.

Morgan: Equity stuff sometimes but not often times that’s also a little bit too complex. Really, a lot of times like if the budget was too low, I would usually say like, “Hey, rather than us trying to go back and forth with a domain owner, you know, why don’t we just look at names that are in your price category?” And that’s why I’ve always been a huge proponent of two-word dotcoms. That’s why we’re branded on two word dotcom.

I think those represent really great opportunities for startup founders in a sub 10,000 even sub $5,000 range. And so, what I usually say is, you know, when you want to get a bigger name, you can do it but don’t fool yourself into thinking that you can be this big juicy one word dotcom when you have like a $25,000 or less budget.

And so it’s really, a lot of it was like just coaching people into being realistic and rather than getting upset with domain owners and going, “Well, they’re asking for this ridiculous price.” Know that it’s an asset class and just like the example I always give is like, “Well, when did your parents buy their house?” They’re like, “Hold on, in the ’70s.” I’m like, “Cool, what do you think they paid for it?” “Oh, it was like $150,000.” I’m like, “What’s the house worth now, you know?” “Oh, 1.5 million.” I’m like, “Well, how would you parents see it if I said, “Look, I’ll give you $100,000 for your house?”

Kevin: It’s a great analogy.

Morgan: And so, they always go, “Oh well,…” And I’m like, “It’s the same thing. And I bet your parents like researched houses then and looked at the neighborhoods and, you know.” Domain investors don’t just randomly buy names. They research them, they put their time into it, there’s a holding cost to them, did a whole portfolio. There’s a lot of risks the domain investor takes and that sides not seen as much by startups. And so, having them see that side of the equation understand, “Okay, maybe the name you want is going to be out of your budget now, where do you start?” And getting people in more of a kind of like realistic mindset around what they can actually get for their money.

Kevin: Has anyone ever come back and maybe they had that sub $10,000 budget but they’ve come back to you and said, “We just got serious round funding for instance and then now we have X amount of dollars to play with. Let’s go after that one that we couldn’t get for ?”

Morgan: Yep, I’ve helped a number of people in that exact scenario. Yeah, yeah, we’ve got some pretty stellar names.

Kevin: So going back a little bit more in time now in terms of just your experience in the domain community. You’ve had, I was going to say handbook, that’s not the right word. But you’ve had tutorials and ebooks that you’ve made and guides that you’ve created really in the early days of your education.

Morgan: Yeah, that’s a long time since I’ve done it, but yeah, I wrote some of the early stuff.

Kevin: But it was just really not only successful just as something that was distributed and read but understood and really helpful to a lot of people. What kind of information would you impart to those that are either new to the industry or those are kind of looking in from the outside.

Morgan: Well, I always like to give anything I’ve done, whether it’s domain names or startups or started some angel investing, I always like to look at people that are already doing it. And so, for me, it was like when I got started in the domain industry, I was going to domain conferences and talking to people like Michael Berkens, Ammar Kubba and Frank Schilling and all these guys that like were way, way light-years ahead of where I was but that I could really learn from.

And I think that’s the key in any kind of education space. Like, when I wrote my book which was, geez, I don’t know, maybe eight years ago or something like that. You know, I didn’t write it as…I found there was just a problem with misinformation and sensationalism in this industry and I’ve really been very against that probably forever because, you know, this is not an easy industry to make money and this is not one of those like you just buy some domain names, and you’re going to make a bunch of money.

And I think too many books and tutorials in this space, we’re talking about like how you can strike it rich with domains, or how you can make a bunch of money with domains. When the reality is like, I don’t know, my first two years, I lost a bunch of money and learned a lot of hard lessons and then, you know, you really have to have like a budget. You need the time, there’s a lot that goes into it.

And so, for me, I really wanted to educate on like what that journey more realistically looks like versus the sensationalism of, “Look at these names that sold last week. This is sold for this, and this is sold for this. I think if you had a name like that, you could…” And rather say like, “Hey, you’re probably going to buy a bunch of stuff, and most of it’s going to suck and you’re not going to be able to sell it, you’re going to get kind of depressed.”

Kevin: Yeah, right. Good. The reality. Yeah.

Morgan: Then you’re going to drop some [cross talk 00:14:04], “Screw this stuff,” and then like…But if you stick with it and you learn, you could probably chisel out a little niche for yourself.

Kevin: Absolutely, yeah. It’s very rare that there’s sort of immediate success. Some people have that happen, especially with some of the new Gs, it does happen, but it is rare.

Morgan: Sure. Yeah. Same thing with the startup space. Like people look at startups like Airbnb or Uber, and these were not startups with just like we’re overnight successes. Like Airbnb had a very, very hard time raising a $500,000 seed round originally. Like no one would fund them when they originally had the idea, right? And so, like they went through lots of hard times and, you know, for us now, there’s a lot that we’re still figuring out. And that’s like, no matter what is it that you’re doing, any of these entrepreneurial endeavors, I don’t think anyone who tells you or any tutorial book that says there’s some like fast-track path to success, I’m always very, very skeptical of.

Kevin: Do you have other things that you would recommend to those that are new or starting out in terms of like tools or resources in this industry?

Morgan: Yeah. I would say, I mean, the number one thing is just get to a conference as soon as you possibly can. I think the amount of information exchange and networking that happen,s particularly domain conferences is pretty massive. It’s not true of every industry. Most of the conferences I go to now are like retail conferences because we sell in the retail space. That’s very different, that actually is kind of like an insider industry.

So I actually can’t really walk around those places and go like, “Hey, what do you do tell me about it?” Like, I’m not really in the club yet. It probably going to take me longer, so I’m more like kind of fly on the wall. At these conferences, I find domain investors, in general, are very interested in sharing what they do. The only thing I would say is whether it’s a conference, or a blog post, or a thread that’s going on or a form, you know, just make sure to do your homework and make sure that the person that is giving you that advice actually is who they say they are and has done what they say they’ve done.

It is very easy for people to kind of prop themselves up when they’re at a conference or when they’re writing on a blog and to say something like, “Oh I did this and…” Like, just put on your BS meter because there is a lot of BS out there. I don’t mean to say it in a negative way but more in a cautionary way of that, you know, take all the conversations that you have, do the follow-up, do the research, and then figure out.

You may even need to bounce off of people that you know, “Hey, I met this guy, and he said he’s made a killing with .nets, and he said if I just buy a bunch of these .nets, I’ll make a fortune.” And go like, “Do you know this? Can you validate that?” And just make sure because it’s an easy industry for people to come in and go, “Oh, I sold a bunch of stuff,” Because there’s no way to prove anything, right?

Kevin: Yeah.

Morgan: And so, you got to be really careful where you get information. And also, looking at the date when the information was given because there an is expiry date to, you know… Sometimes people will write to me and say like, “Oh, this blog post you wrote in 2012 is so great.” I’m like, “Be really careful with anything that I wrote five years ago.” Because if I said five years ago, here’s what I’m doing and like this is really working right now, I can almost promise you it would be a disaster if you did that now.

And that’s why the information, especially in a fast-moving space like domain investing, you got to stay on top of what’s relevant. And you have to make sure that the people giving you the advice are doing it because they’re motivated not to like make money off of you, or to make themselves so good but because they genuinely like know what they’re talking and want to help.

Kevin: Sure. Just due diligence, I think I have some yeah wise words.

Morgan: Yes.

Kevin: It’s always interesting to kind of…we’ve been around for a little while. There’s various people that have been around either 20 more years, or there’s some that have been around for 20 days.

Morgan: So you’re calling us old?

Kevin: Yeah, we’re getting old. Yeah, that’s right. But it’s always interesting for me to see how people on the outside looking in or those actually that are new. How you would describe this industry to them like if you’re on an airplane and you’re in the middle of the sea all of a sudden and, you know, ask you what you do and you have like a six-hour flight. How do you talk about this to people? This has been a really interesting thing where sometimes there’s that blank stare. Everybody says some will gives you that blank stare like…and then now there’s a bit more talk about how people are starting to kind of, the awareness is growing.

Morgan: Sure, yeah. I think it’s to be honest with you, I think these are just investors. I think that historically if you are an investor, you either invest in the stock market, or you invest in real estate. But like the internet’s been around for a while, this stuff is all evolved, and so I think it’s really just looking at domain names as a new asset class. So usually I explain to people this isn’t necessarily a bunch of startup people, or even some people are entrepreneurs, but not everyone’s really entrepreneurs even as well. It’s really investors.

And it’s just like where do you want to invest your money and whether you invest in real estate or the stock market or domain names, similar process which is educating yourself on the space and learning, “Hey, how can I make investments that give me kind of a meaningful ROI?” I think this is just possibly one of the least known investment spaces and then probably the most misunderstood.

Kevin: Morgan, thanks so much for joining us. Treasure your time, and it’s great to see you as always.

Morgan: Yeah, absolutely. Thanks so much. I appreciate it.

Kevin: Thank you.
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Gary Vaynerchuk on Domains, plus – get a free copy of his new book

Gary Vaynerchuk is well known as a social media early adopter, successful author of Crush It!, and of course, wine guy at DailyGrape.com but did you realize he knows domains too?  I had the opportunity to talk to Gary about his new book, The Thank You Economy and we touched on domaining as well.  If you haven’t heard him speak in the past, you’re in for a treat.  In addition, I have 5 copies of Gary’s book to give away.  Watch the video and leave a comment below to be entered to win one of them.

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Update: Sully’s Blog Goes Video (Video now viewable)

I’ve been working on quite a few video interviews over at MO.com and I love the direction that is taking. There’s nothing like hearing and seeing people talk about their experiences. There is so much more to be gained by seeing as opposed to the written interview. Written interviews are great, and they have their own list of positives. But you don’t always feel the emotion or passion behind the interviewees.

My first video interview is with Antonio Centeno of aTailoredSuit.com. A special thanks goes out to Antonio for volunteering to be the first video interview and helping me work through some of the kinks.  Let me know what you think.

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