Morgan Linton of Bold Metrics

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.